Weatherford International PLC (WFRD)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	1,366.81	621.21	803.47	764.22	137.31
Days of sales outstanding (DSO)	days	83.61	88.36	83.35	82.61	81.82
Number of days of payables	days	1,230.13	535.28	536.42	433.44	62.24
Cash conversion cycle	days	220.29	174.29	350.39	413.39	156.88

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 1,366.81 + 83.61 – 1,230.13
= 220.29

The cash conversion cycle of Weatherford International PLC has shown fluctuating trends over the past five years. In December 31, 2020, the cash conversion cycle was at 156.88 days, indicating a relatively efficient conversion of cash. However, this efficiency deteriorated significantly by December 31, 2021, when the cycle increased to 413.39 days, suggesting that the company took longer to convert its investments or expenses into cash receipts.

By December 31, 2022, Weatherford International PLC managed to reduce the cash conversion cycle to 350.39 days, but it still remained high compared to the initial period. The following year, in December 31, 2023, a notable improvement was seen with a decrease to 174.29 days, indicating better management of cash flows and working capital.

The most recent data as of December 31, 2024, showed a slight increase in the cash conversion cycle to 220.29 days compared to the previous year. Overall, the company has experienced fluctuations in its cash conversion cycle, highlighting the importance of effectively managing working capital to optimize cash flow processes.