Advance Auto Parts Inc (AAP)
Working capital turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Oct 7, 2023 | Sep 30, 2023 | Jul 15, 2023 | Jun 30, 2023 | Apr 22, 2023 | Mar 31, 2023 | Dec 31, 2022 | Oct 8, 2022 | Sep 30, 2022 | Jun 30, 2022 | Apr 23, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 9, 2021 | Sep 30, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 10,233,310 | 10,702,160 | 11,273,250 | 11,309,280 | 10,589,100 | 10,810,300 | 11,508,810 | 12,207,320 | 11,994,990 | 11,950,260 | 11,174,010 | 10,421,850 | 11,314,910 | 12,047,780 | 11,803,420 | 11,759,220 | 11,013,650 | 10,288,860 | 10,541,300 | 11,250,440 |
| Total current assets | US$ in thousands | 6,143,540 | 7,493,770 | 6,460,140 | 6,341,210 | 6,377,020 | 6,320,690 | 6,320,460 | 6,321,320 | 6,326,470 | 6,196,740 | 6,201,690 | 6,014,820 | 6,159,720 | 6,162,520 | 6,183,160 | 6,057,780 | 6,057,780 | 6,275,480 | 6,161,260 | 6,161,260 |
| Total current liabilities | US$ in thousands | 4,665,360 | 5,593,540 | 5,256,770 | 5,209,850 | 5,307,400 | 5,216,700 | 5,135,940 | 5,101,760 | 5,026,380 | 5,055,350 | 4,983,460 | 5,420,850 | 5,436,630 | 5,442,900 | 5,341,820 | 5,052,570 | 5,052,570 | 5,180,310 | 4,955,230 | 4,955,230 |
| Working capital turnover | 6.92 | 5.63 | 9.37 | 10.00 | 9.90 | 9.79 | 9.72 | 10.01 | 9.23 | 10.47 | 9.17 | 17.55 | 15.65 | 16.74 | 14.03 | 11.70 | 10.96 | 9.39 | 8.74 | 9.33 |
December 31, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $10,233,310K ÷ ($6,143,540K – $4,665,360K)
= 6.92
The working capital turnover ratio measures how efficiently a company is using its working capital to generate sales revenue. A high working capital turnover ratio indicates that a company is effectively utilizing its current assets to support its operations and generate sales.
Analyzing the working capital turnover data for Advance Auto Parts Inc from September 2021 to December 2024, we observe fluctuations in the ratio over time. The ratio ranged from a low of 5.63 in September 2024 to a high of 17.55 in December 2022.
The trend in the working capital turnover ratio indicates that Advance Auto Parts Inc demonstrated fluctuating efficiency in managing its working capital during the period under review. The company experienced a notable increase in efficiency from September 2022 to December 2022, as evidenced by the significant rise in the ratio from 16.74 to 17.55.
However, there was a decline in efficiency from December 2022 to September 2024, with the ratio dropping to 5.63 by September 2024. This decline suggests that the company may have faced challenges in effectively utilizing its working capital to support its sales activities during this period.
Overall, it is important for Advance Auto Parts Inc to closely monitor its working capital turnover ratio and strive to maintain a balance between efficiently utilizing its current assets and supporting its sales operations effectively to ensure sustainable growth and profitability in the long term.
Peer comparison
Dec 31, 2024