Weatherford International PLC (WFRD)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	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	86.89	99.13	92.97	87.74
Days of sales outstanding (DSO)	days	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	87.38	87.70	82.18	75.43
Number of days of payables	days	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	52.30	55.20	63.21	62.34
Cash conversion cycle	days	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	121.97	131.63	111.94	100.83

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 621.21 + 88.36 – 535.28
= 174.29

The cash conversion cycle of Weatherford International plc has shown a downward trend from Q1 2022 to Q4 2023, indicating an improvement in managing its cash flow and working capital. The company's ability to convert its inventory into cash and collect receivables more efficiently has led to a decrease in the number of days it takes to complete a full cash conversion cycle.

In Q4 2023, the company's cash conversion cycle was at 98.15 days, the lowest among the reported quarters, suggesting that Weatherford International plc has been able to optimize its working capital management effectively. This reduction in the cash conversion cycle signifies that the company is operating more efficiently, converting its resources into cash quicker, and potentially improving its liquidity position.

Overall, the decreasing trend in the cash conversion cycle over the quarters indicates that Weatherford International plc has been progressively improving its operational efficiency in terms of managing its cash flow, inventory, and accounts receivable. This enhanced efficiency is indicative of the company's ability to better control its working capital and generate cash flow, which could ultimately lead to improved financial performance and stability.