Weatherford International PLC (WFRD)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	1,366.81	659.01	642.75	654.54	621.21	976.69	945.22	886.60	788.35	737.14	780.12	734.29	764.22	317.45	299.42	207.34	204.46	135.17	106.73	109.88
Days of sales outstanding (DSO)	days	83.61	82.87	90.39	87.90	88.36	92.39	81.40	86.73	83.35	82.79	86.77	84.46	82.61	109.58	85.03	70.67	67.31	53.89	62.82	86.97
Number of days of payables	days	1,230.13	518.46	560.59	551.35	535.28	780.34	631.83	619.02	526.33	433.31	488.12	413.31	433.44	163.15	157.40	101.22	92.68	55.33	47.54	59.54
Cash conversion cycle	days	220.29	223.42	172.55	191.08	174.29	288.73	394.80	354.31	345.37	386.61	378.77	405.45	413.39	263.88	227.05	176.79	179.09	133.72	122.00	137.31

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 fluctuations over the past few years. The cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cycle is generally more favorable as it indicates that the company is able to efficiently manage its working capital.

From the data provided, we observe that Weatherford's cash conversion cycle ranged from a low of 122 days in June 2020 to a high of 413.39 days in December 2021. This significant increase could be a signal of potential issues in managing its working capital efficiently during that period. Subsequently, the company managed to reduce the cycle to 172.55 days by June 2024, implying improved efficiency in working capital management.

Overall, it is important for Weatherford International PLC to closely monitor and manage its cash conversion cycle to ensure optimal liquidity and operational efficiency. By maintaining a shorter cash conversion cycle, the company can enhance its cash flow generation and overall financial performance.