Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Geographic Areas
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Current Ratio since 2005
- Aggregate Accruals
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Short-term Activity Ratios (Summary)
National Oilwell Varco Inc., short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
The analysis of the quarterly financial ratios and periods over the observed timeline reveals several notable trends and patterns.
- Inventory Turnover
- The inventory turnover ratio demonstrates a fluctuating pattern with a general upward trend from 2.19 in September 2011 to a peak of 3.16 in September 2014, indicating improving efficiency in inventory management. However, post-2014, there is a consistent decline, reaching 2.01 by June 2016, which may suggest a slowdown in inventory turnover or accumulation.
- Receivables Turnover
- Receivables turnover exhibits moderate fluctuations but maintains an overall increasing trajectory from 4.41 in September 2011 to a high of 5.76 in June 2015. This increase implies enhanced efficiency in collecting receivables over that period. The ratio subsequently experiences slight variability but remains relatively strong, ending at 4.86 in June 2016.
- Payables Turnover
- The payables turnover ratio shows a significant upward trend starting from 9.51 in September 2011 to 21.4 in March 2016, indicating that the company is accelerating its payments to suppliers. This might reflect improved liquidity or strategic payment policies. However, by June 2016, the ratio slightly declines to 19.89.
- Working Capital Turnover
- Working capital turnover maintains a somewhat stable yet slightly declining pattern from 2.61 in September 2011 to 1.59 by June 2016, signaling a reduction in efficiency in utilizing working capital to generate revenue over time.
- Average Inventory Processing Period
- The average inventory processing period initially increases from 145 days in March 2011, peaking at 167 days in September 2011, followed by a decline to 116 days in September 2014. After that, it rises again to reach 181 days by June 2016, indicating that inventory remains on hand longer in recent periods, potentially pointing to slower inventory movement.
- Average Receivable Collection Period
- This metric shows a general decreasing trend, moving from 83 days in September 2011 down to 63 days in March 2015, signifying improved collection efficiency. However, after this low point, the period increases to 75 days by June 2016, indicating some worsening in receivables collection in the latest quarters.
- Operating Cycle
- The operating cycle varies between 194 and 256 days across the observed quarters, with a downward trend from 250 days in September 2011 to a low of 189 days in March 2014, reflecting more efficient operational processes. Yet, from March 2015 onwards, the cycle lengthens again to 256 days in June 2016, suggesting the company's operations are taking longer to convert inventory and receivables to cash.
- Average Payables Payment Period
- The average payables payment period decreases steadily from a high of 38 days in September 2011 to a low of 17 days in March 2016, indicating the company is paying its suppliers more quickly over time, potentially to improve supplier relationships or take advantage of early payment terms. A slight uptick to 18 days is noted by June 2016.
- Cash Conversion Cycle
- The cash conversion cycle follows a pattern similar to the operating cycle, with initial stability around 195-212 days, decreasing notably to 163 days in March 2014, implying faster conversion of investments into cash. However, from 2015 onwards, the cycle extends considerably up to 238 days by June 2016, reflecting a lengthening period to turn resources back into cash, potentially due to slower inventory turnover or collection periods.
Turnover Ratios
Average No. Days
Inventory Turnover
National Oilwell Varco Inc., inventory turnover calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||||||||
| Inventories, net | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Inventory turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Inventory turnover
= (Cost of revenueQ2 2016
+ Cost of revenueQ1 2016
+ Cost of revenueQ4 2015
+ Cost of revenueQ3 2015)
÷ Inventories, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
- Cost of Revenue
- The cost of revenue exhibited an increasing trend from March 2011, starting at 2,171 million USD and peaking at 4,675 million USD by December 2013. Following this peak, there was a noticeable decline over the subsequent periods, reaching 1,689 million USD by June 2016. This pattern suggests a period of expansion up to late 2013, followed by a contraction phase through mid-2016.
- Inventories, Net
- Inventories generally increased from 3,570 million USD in March 2011 to a high of 6,135 million USD in March 2013. After this peak, inventory levels fluctuated slightly but mostly decreased to 4,287 million USD by June 2016. This pattern reflects a build-up of inventory leading up to early 2013, followed by a gradual reduction over the following three years.
- Inventory Turnover Ratio
- The inventory turnover ratio, available from September 2011 onward, started at 2.52 and showed some fluctuations over the years. The ratio increased to a peak of 3.16 by September 2014, indicating improved efficiency in inventory management during this period. Thereafter, the turnover ratio steadily declined to 2.01 by June 2016, suggesting a slowdown in inventory movement relative to sales or costs.
- Overall Financial Trends
- The data reveals a cycle of growth and contraction. Cost of revenue and inventories both rose substantially until around 2013, corresponding with an increase in inventory turnover rate, which implies improving operational efficiency initially. After 2013, the decline in cost of revenue and inventories, accompanied by a decreasing turnover ratio, points to reduced sales activity or possibly more conservative inventory management amidst a challenging business environment.
Receivables Turnover
National Oilwell Varco Inc., receivables turnover calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||
| Receivables, net | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Receivables turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Receivables turnover
= (RevenueQ2 2016
+ RevenueQ1 2016
+ RevenueQ4 2015
+ RevenueQ3 2015)
÷ Receivables, net
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The revenue of the company demonstrates a distinct cyclical pattern with an overall downward trend beginning in early 2014. Starting at 3,146 million US dollars in the first quarter of 2011, revenue increased steadily, peaking at 5,709 million US dollars in the last quarter of 2014. Thereafter, a noticeable decline occurs, falling to 1,724 million US dollars by the second quarter of 2016. This suggests a contraction in business activity or market demand after 2014.
Receivables, net also exhibit a rising trend from the first quarter of 2011 through early 2014, growing from 2,757 million US dollars to 5,310 million US dollars by the first quarter of 2014. After this peak, receivables begin to decrease, reaching 2,044 million US dollars by mid-2016. The fluctuation in receivables mirrors the revenue movement, indicating a correlation between sales volume and amounts owed by customers.
Receivables turnover ratios are available starting from the last quarter of 2011. The ratios fluctuate between approximately 4.23 and 5.76 times during this period, with a general tendency to increase slightly over time. A higher turnover ratio implies enhanced efficiency in collecting receivables relative to sales. Notable peaks occur around mid-2015, indicating improved collection efficiency even as revenue falls.
- Revenue
- Shows strong growth from 2011 through 2014, followed by a sharp decline from 2015 onward.
- Receivables, net
- Follow a similar pattern to revenue with growth peaking in early 2014 and subsequent decline, suggesting alignment with sales trends.
- Receivables turnover
- Exhibits moderate variability with an overall slight upward trend, indicating an improvement in credit collection efficiency despite declining revenues post-2014.
Overall, the data reflects a period of growth and expansion through 2014, followed by contraction impacting both revenue and receivables. The increasing receivables turnover ratio in more recent periods may indicate management efforts to optimize cash flow through faster collection, which becomes critical amid reduced revenue levels.
Payables Turnover
National Oilwell Varco Inc., payables turnover calculation (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Payables turnover
= (Cost of revenueQ2 2016
+ Cost of revenueQ1 2016
+ Cost of revenueQ4 2015
+ Cost of revenueQ3 2015)
÷ Accounts payable
= ( + + + )
÷ =
The analysis of the quarterly financial data reveals notable trends in the key operational metrics over the examined periods.
- Cost of Revenue
- The cost of revenue demonstrated a generally increasing trend from early 2011 through late 2013, rising from approximately $2.17 billion to a peak near $4.68 billion by December 2013. This reflects an expansion in operational scale or input costs during this period. Following this peak, the cost steadily declined from early 2014 through mid-2016, decreasing from roughly $3.6 billion to $1.69 billion. This reduction indicates either a downsizing of operations, improved cost efficiency, or reduced sales volume in the latter timeframe.
- Accounts Payable
- Accounts payable increased alongside cost of revenue until early 2013, going from about $656 million in March 2011 to an apex near $1.39 billion in March 2014. After this high point, the metric trended downward, dropping to approximately $434 million by June 2016. This pattern corresponds broadly to the movements in cost of revenue, suggesting that supplier credit utilization expanded during growth phases and contracted amid shrinking expenditures.
- Payables Turnover Ratio
- The payables turnover ratio, measuring how frequently payables are paid off within a period, started at about 11.28 in March 2011 and showed minor fluctuations until the end of 2012. From early 2013 onward, this ratio rose substantially, reaching a high of 21.4 by March 2016 before a slight decrease to 19.89 in June 2016. An increasing payables turnover ratio typically indicates a quicker payment cycle, implying that the company was accelerating its payments to suppliers or reducing accounts payable balances more rapidly during the later periods.
In summary, the data depicts a phase of operational growth and expansion through 2013, characterized by increasing costs and larger payables, followed by a contraction period from 2014 to mid-2016, marked by decreased cost of revenue and accounts payable. The concurrent rise in payables turnover ratio during the contraction phase suggests an improvement in payment practices or a strategic shift in supplier relationships.
Working Capital Turnover
National Oilwell Varco Inc., working capital turnover calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Current assets | |||||||||||||||||||||||||||||
| Less: Current liabilities | |||||||||||||||||||||||||||||
| Working capital | |||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Working capital turnover1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Working capital turnover
= (RevenueQ2 2016
+ RevenueQ1 2016
+ RevenueQ4 2015
+ RevenueQ3 2015)
÷ Working capital
= ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in key financial metrics over the examined periods.
- Working Capital
- The working capital figures demonstrate fluctuations with an overall declining trend from early 2011 to mid-2016. Initially, working capital increased from 6,607 million USD in March 2011 to peak at 10,029 million USD in December 2012. Following this peak, a general decrease is observed, reaching 6,257 million USD by June 2016. This suggests diminishing short-term liquidity over time, particularly pronounced after 2014 where the values consistently dropped each quarter.
- Revenue
- Revenue trends show an initial upward trajectory from 3,146 million USD in March 2011 to a high of 6,172 million USD in December 2013. Subsequently, revenue experiences a marked decline starting from 2014, moving downward continuously to 1,724 million USD by June 2016. This sharp decrease, particularly from 2014 onwards, indicates significant contraction in sales or operational scale.
- Working Capital Turnover Ratio
- The working capital turnover ratio, representing revenue generated per unit of working capital, is available from December 2011 onward. The ratio fluctuates between approximately 2.00 and 2.61 from late 2011 to late 2014, reflecting relatively stable efficiency in using working capital to generate revenues during this period. However, a declining trend begins after 2014, falling steadily from around 2.44 in March 2015 to 1.59 by June 2016. This decline suggests a weakening efficiency in revenue generation relative to the working capital employed.
Overall, the data indicates that while the company managed to improve its revenue and maintain operational efficiency up to late 2013 or early 2014, it faced substantial challenges thereafter. The reductions in both working capital and revenue combined with a falling turnover ratio point toward deteriorating liquidity and efficiency, likely reflecting tougher market conditions or operational setbacks during the 2014-2016 timeframe.
Average Inventory Processing Period
National Oilwell Varco Inc., average inventory processing period calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Inventory turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average inventory processing period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover Trend
- The inventory turnover ratio shows a fluctuating but generally declining trend from March 2012 through June 2016. Starting at 2.52 in March 2012, it slightly decreased to 2.44 in June 2012, followed by a decline to a low of 2.19 in September 2012. The ratio then improved steadily, reaching a peak of 3.16 in September 2014. After this peak, a consistent downward trend was observed, declining from 2.95 in December 2014 to 2.01 by June 2016.
- Average Inventory Processing Period
- The average inventory processing period in days exhibits a pattern inverse to the inventory turnover ratio. It began at 145 days in March 2012, increasing to 167 days by September 2012. Subsequent months saw a reduction, hitting a low of 116 days in September 2014. Thereafter, this metric rose steadily, increasing from 123 days in December 2014 to 181 days in June 2016.
- Relationship Between Metrics
- There is a clear inverse correlation between the inventory turnover ratio and the average inventory processing period throughout the observed periods. When the turnover ratio increases, the processing period shortens, indicating faster inventory movement. Conversely, when the turnover ratio decreases, it corresponds to a lengthening inventory processing period, suggesting slower inventory turnover.
- Overall Insights
- The data indicates an improvement in inventory management from 2012 through 2014, characterized by higher turnover and quicker processing. However, from late 2014 onward, there was a deterioration in inventory efficiency, as reflected by the declining turnover ratio and increasing days in inventory processing. The most recent quarters up to mid-2016 suggest challenges in converting inventory promptly, potentially signaling operational or market-related factors affecting inventory control.
Average Receivable Collection Period
National Oilwell Varco Inc., average receivable collection period calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Receivables turnover | |||||||||||||||||||||||||||||
| Short-term Activity Ratio (no. days) | |||||||||||||||||||||||||||||
| Average receivable collection period1 | |||||||||||||||||||||||||||||
| Benchmarks (no. days) | |||||||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
The receivables turnover ratio exhibits a generally positive trend from March 31, 2011, through June 30, 2016. The ratio starts at 4.45 in the earliest recorded quarter and increases over time, reaching a peak of 5.76 in June 30, 2015. This upward movement suggests an improvement in the efficiency with which receivables are collected, indicating a potentially stronger cash flow position or enhanced credit management practices. Despite some fluctuations, the ratio mostly remains above 4.5 after 2011, showing sustained relative strength in receivables turnover.
Complementing this, the average receivable collection period displays an inverse relationship with the turnover ratio, as expected. It begins at 82 days in March 31, 2011, and generally declines over the observed period, reaching a low of 63 days by June 30, 2015. This reduction in collection period reflects faster receivables collection on average, which corresponds to the increasing turnover ratio. However, some variability is evident, such as a short-term increase to 86 days in March 31, 2014, and other minor fluctuations, indicating occasional delays or changes in billing and collection effectiveness.
- Trends in Receivables Turnover
- The ratio strengthens over the five-year span, indicating improved asset utilization regarding receivables.
- Peaks in 2015 suggest unusually high collection efficiency during that period.
- Quarterly variations remain within a relatively narrow band, demonstrating consistent operational management.
- Trends in Average Receivable Collection Period
- The general decline in days supports the narrative of faster collections and improved liquidity.
- Fluctuations such as the spike to 86 days hint at transient influences affecting credit policy or customer payment behavior.
- The inverse relationship with turnover ratio aligns with standard receivables management dynamics.
Overall, the data imply a strengthening in receivable management effectiveness over the period under review, with faster turnover and shorter collection periods contributing positively to financial health and working capital efficiency.
Operating Cycle
National Oilwell Varco Inc., operating cycle calculation (quarterly data)
No. days
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | |||||||||||||||||||||||||||||
| Average inventory processing period | |||||||||||||||||||||||||||||
| Average receivable collection period | |||||||||||||||||||||||||||||
| Short-term Activity Ratio | |||||||||||||||||||||||||||||
| Operating cycle1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Operating Cycle, Competitors2 | |||||||||||||||||||||||||||||
| Schlumberger Ltd. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in operating efficiency over the observed periods. The metrics examined include the average inventory processing period, average receivable collection period, and the operating cycle, each measured in number of days.
- Average Inventory Processing Period
- The average inventory processing period demonstrates an overall increasing trend from 145 days in March 2012 to a peak of 181 days in June 2016. The period fluctuates moderately throughout, with notable increases observed particularly in the last four quarters where the days extended from 146 in March 2015 to 181 in June 2016. This suggests increasing time required to convert inventory into goods sold, potentially indicating challenges in inventory turnover or changes in inventory management policies.
- Average Receivable Collection Period
- The average receivable collection period fluctuates between 63 and 86 days across the quarterly periods. Initially, there is a slight downward trend from 82 days in March 2012 to a low of 63 days by March 2015, indicating improved efficiency in collecting receivables. However, post this low point, the collection period rises again, reaching 75 days by June 2016. The variability implies inconsistency in the company's ability to collect payments promptly over the analyzed timeframe.
- Operating Cycle
- The operating cycle, combining inventory and receivables periods, shows a general upward movement from 227 days as of March 2012 to 256 days in June 2016. Despite some fluctuations, the operating cycle lengthens over time, particularly during the last three quarters, which coincide with the increasing trend in inventory processing duration. This elongation of the operating cycle indicates that the company takes longer to convert its investments in inventory and receivables into cash inflows.
In summary, the data indicates that the company experienced growing delays in inventory processing and a longer overall operating cycle in the later periods, while the receivable collection period showed improvement up to early 2015 before deteriorating somewhat. The extended operating cycle could affect cash flow and working capital management, highlighting areas for potential operational improvements.
Average Payables Payment Period
National Oilwell Varco Inc., average payables payment period calculation (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
The payables turnover ratio exhibits a generally increasing trend over the observed periods, indicating an acceleration in the frequency with which the company is paying off its suppliers. Starting from a turnover ratio of 11.28 in March 2011, the ratio experienced fluctuations but showed a clear upward trajectory, reaching a peak of 21.4 in March 2016 before slightly decreasing to 19.89 by June 2016. This upward movement suggests enhanced efficiency or changes in payment terms leading to quicker supplier payments.
Correspondingly, the average payables payment period demonstrates a declining trend, moving from approximately 32 days in March 2011 to 17-18 days by the first half of 2016. This decline aligns inversely with the payables turnover ratio, as a higher turnover ratio typically reflects a shorter payment period. The reduction in the average payment period implies that the company has improved its payment processes or negotiating capabilities, allowing for sooner settlements with creditors.
The consistency in these trends over multiple years reflects a strategic shift or sustained operational change toward faster payment cycles. The combination of increased payables turnover and decreased payment days suggests improved liquidity management or amendments in vendor agreements, potentially enhancing supplier relationships and impacting cash flow dynamics.
- Payables Turnover Ratio
- Increased from 11.28 to a high of 21.4 between 2011 and early 2016, then slightly decreased to 19.89 by mid-2016.
- Average Payables Payment Period
- Decreased consistently from 32 days to approximately 17-18 days over the same period.
- Implications
- Faster turnover and shorter payment period indicate improved payment efficiency and possibly better working capital management.
Cash Conversion Cycle
National Oilwell Varco Inc., cash conversion cycle calculation (quarterly data)
No. days
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
The analysis of the quarterly financial data reveals several notable trends in the operational efficiency metrics over the examined periods.
- Average Inventory Processing Period
- The average inventory processing period demonstrates a generally fluctuating trend with an overall increase observed toward the later periods. Starting from 145 days in early 2012, it peaks at 167 days in the third quarter of 2012, followed by a decrease through 2013 and early 2014 to around 116 days. However, from early 2015 onwards, there is a consistent upward movement, culminating at 181 days by the middle of 2016. This trend suggests increasing inventory holding times, which may reflect changes in inventory management, supply chain conditions, or product mix.
- Average Receivable Collection Period
- The average receivable collection period shows variation within a relatively stable range. Beginning near 82 days in early 2012, it slightly declines to the low 70s throughout most of 2013 and 2014. There is a minor dip to a low of 63 days in the first quarter of 2015 but subsequently rises again to 75 days by mid-2016. This overall stability with mild fluctuations indicates consistent credit policies and customer payment behavior, with minor seasonal or operational influences affecting collection efficiency.
- Average Payables Payment Period
- The average payables payment period is characterized by a clear downward trend over the examined periods. From around 32-38 days through 2012, it steadily decreases to 26-28 days during 2013 and early 2014, further contracting to a low of 17-18 days by mid-2016. This reduction indicates a faster payment cycle to suppliers, potentially reflecting changes in negotiation terms, efforts to improve supplier relationships, or working capital management strategies emphasizing the reduction of payables duration.
- Cash Conversion Cycle
- The cash conversion cycle (CCC) exhibits a cyclical yet increasing trend. Starting at approximately 195 days in early 2012, it oscillates through the years but shows an overall rise especially from 2015 onward, rising from 171 days to 238 days by mid-2016. The increasing CCC correlates with the longer inventory periods and the slightly variable receivables period, alongside the decreasing payables period, implying that cash is tied up in operations for longer durations, potentially impacting liquidity.
In summary, the data indicates a lengthening of inventory holding times and an overall increase in the cash conversion cycle, which may suggest challenges in inventory management or market demand conditions. Receivables collection remains fairly consistent, while the company appears to be accelerating its payments to suppliers. These trends collectively suggest a shift in working capital dynamics that could influence liquidity and operational efficiency going forward.