Weatherford International PLC (WFRD)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 5,023,000 | 4,331,000 | 3,645,000 | 3,685,000 | 4,954,000 |
| Total current assets | US$ in thousands | 3,345,000 | 3,043,000 | 2,911,000 | 3,177,000 | 3,453,000 |
| Total current liabilities | US$ in thousands | 1,866,000 | 1,470,000 | 1,332,000 | 1,362,000 | 1,672,000 |
| Working capital turnover | 3.40 | 2.75 | 2.31 | 2.03 | 2.78 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $5,023,000K ÷ ($3,345,000K – $1,866,000K)
= 3.40
Working capital turnover is a financial ratio that measures how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is effectively managing its working capital to support its sales activities.
In the case of Weatherford International plc, the working capital turnover ratio has been improving over the past three years. In 2023, the ratio was 3.47, higher than the ratios of 2.75 in 2022 and 2.31 in 2021. This upward trend suggests that the company has become more efficient in its use of working capital to generate sales.
An increasing working capital turnover ratio may indicate that Weatherford International plc has been able to optimize its inventory, accounts receivable, and accounts payable levels to support its sales growth. This could be the result of effective inventory management, streamlined accounts receivable collections, and efficient payables management.
Overall, the improving trend in Weatherford International plc's working capital turnover ratio reflects positively on the company's operational efficiency and financial management practices. It suggests that the company is using its working capital more effectively to drive revenue generation, which can contribute to improved profitability and financial performance.
Peer comparison
Dec 31, 2023