Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
National Oilwell Varco Inc., short-term (operating) activity ratios
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | National Oilwell Varco Inc. inventory turnover ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | National Oilwell Varco Inc. receivables turnover ratio improved from 2013 to 2014 and from 2014 to 2015. |
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | National Oilwell Varco Inc. payables turnover ratio decreased from 2013 to 2014 but then increased from 2014 to 2015 exceeding 2013 level. |
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | National Oilwell Varco Inc. working capital turnover ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015. |
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | National Oilwell Varco Inc. number of days of inventory outstanding deteriorated from 2013 to 2014 and from 2014 to 2015. |
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | National Oilwell Varco Inc. number of days of receivables outstanding improved from 2013 to 2014 and from 2014 to 2015. |
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | National Oilwell Varco Inc. operating cycle deteriorated from 2013 to 2014 and from 2014 to 2015. |
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | National Oilwell Varco Inc. number of days of payables outstanding increased from 2013 to 2014 but then decreased significantly from 2014 to 2015. |
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | National Oilwell Varco Inc. cash conversion cycle deteriorated from 2013 to 2014 and from 2014 to 2015. |
Inventory Turnover
National Oilwell Varco Inc., inventory turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of revenue | 11,694) | 15,631) | 17,380) | 14,702) | 10,161) | |
| Inventories, net | 4,678) | 5,281) | 5,603) | 5,891) | 4,030) | |
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | 2.50 | 2.96 | 3.10 | 2.50 | 2.52 | |
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Inventory turnover = Cost of revenue ÷ Inventories, net
= 11,694 ÷ 4,678 = 2.50
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Inventory turnover | An activity ratio calculated as cost of goods sold divided by inventory. | National Oilwell Varco Inc. inventory turnover ratio deteriorated from 2013 to 2014 and from 2014 to 2015. |
Receivables Turnover
National Oilwell Varco Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenue | 14,757) | 21,440) | 22,869) | 20,041) | 14,658) | |
| Receivables, net | 2,926) | 4,416) | 4,896) | 4,320) | 3,291) | |
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | 5.04 | 4.86 | 4.67 | 4.64 | 4.45 | |
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Receivables turnover = Revenue ÷ Receivables, net
= 14,757 ÷ 2,926 = 5.04
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Receivables turnover | An activity ratio equal to revenue divided by receivables. | National Oilwell Varco Inc. receivables turnover ratio improved from 2013 to 2014 and from 2014 to 2015. |
Payables Turnover
National Oilwell Varco Inc., payables turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cost of revenue | 11,694) | 15,631) | 17,380) | 14,702) | 10,161) | |
| Accounts payable | 623) | 1,189) | 1,275) | 1,200) | 901) | |
| Short-term Activity Ratio | ||||||
| Payables turnover1 | 18.77 | 13.15 | 13.63 | 12.25 | 11.28 | |
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Payables turnover = Cost of revenue ÷ Accounts payable
= 11,694 ÷ 623 = 18.77
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Payables turnover | An activity ratio calculated as cost of goods sold divided by payables. | National Oilwell Varco Inc. payables turnover ratio decreased from 2013 to 2014 but then increased from 2014 to 2015 exceeding 2013 level. |
Working Capital Turnover
National Oilwell Varco Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 11,801) | 16,162) | 16,423) | 15,678) | 12,110) | |
| Less: Current liabilities | 4,249) | 7,374) | 6,678) | 5,649) | 5,416) | |
| Working capital | 7,552) | 8,788) | 9,745) | 10,029) | 6,694) | |
| Revenue | 14,757) | 21,440) | 22,869) | 20,041) | 14,658) | |
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | 1.95 | 2.44 | 2.35 | 2.00 | 2.19 | |
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Working capital turnover = Revenue ÷ Working capital
= 14,757 ÷ 7,552 = 1.95
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Working capital turnover | An activity ratio calculated as revenue divided by working capital. | National Oilwell Varco Inc. working capital turnover ratio improved from 2013 to 2014 but then deteriorated significantly from 2014 to 2015. |
Average Inventory Processing Period
National Oilwell Varco Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | 2.50 | 2.96 | 3.10 | 2.50 | 2.52 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | 146 | 123 | 118 | 146 | 145 | |
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 2.50 = 146
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average inventory processing period | An activity ratio equal to the number of days in the period divided by inventory turnover over the period. | National Oilwell Varco Inc. number of days of inventory outstanding deteriorated from 2013 to 2014 and from 2014 to 2015. |
Average Receivable Collection Period
National Oilwell Varco Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | 5.04 | 4.86 | 4.67 | 4.64 | 4.45 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | 72 | 75 | 78 | 79 | 82 | |
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 5.04 = 72
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average receivable collection period | An activity ratio equal to the number of days in the period divided by receivables turnover. | National Oilwell Varco Inc. number of days of receivables outstanding improved from 2013 to 2014 and from 2014 to 2015. |
Operating Cycle
National Oilwell Varco Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 146 | 123 | 118 | 146 | 145 | |
| Average receivable collection period | 72 | 75 | 78 | 79 | 82 | |
| Short-term Activity Ratio | ||||||
| Operating cycle1 | 218 | 198 | 196 | 225 | 227 | |
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 146 + 72 = 218
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Operating cycle | Equal to average inventory processing period plus average receivables collection period. | National Oilwell Varco Inc. operating cycle deteriorated from 2013 to 2014 and from 2014 to 2015. |
Average Payables Payment Period
National Oilwell Varco Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | 18.77 | 13.15 | 13.63 | 12.25 | 11.28 | |
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | 19 | 28 | 27 | 30 | 32 | |
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 18.77 = 19
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Average payables payment period | An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. | National Oilwell Varco Inc. number of days of payables outstanding increased from 2013 to 2014 but then decreased significantly from 2014 to 2015. |
Cash Conversion Cycle
National Oilwell Varco Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | 146 | 123 | 118 | 146 | 145 | |
| Average receivable collection period | 72 | 75 | 78 | 79 | 82 | |
| Average payables payment period | 19 | 28 | 27 | 30 | 32 | |
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | 199 | 170 | 169 | 195 | 195 | |
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Schlumberger Ltd. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 146 + 72 – 19 = 199
2 Click competitor name to see calculations.
| Short-term activity ratio | Description | The company |
|---|---|---|
| Cash conversion cycle | A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations; equal to average inventory processing period plus average receivables collection period minus average payables payment period. | National Oilwell Varco Inc. cash conversion cycle deteriorated from 2013 to 2014 and from 2014 to 2015. |