Advance Auto Parts Inc (AAP)
Working capital turnover
| Dec 31, 2023 | Oct 7, 2023 | Jul 15, 2023 | Apr 22, 2023 | Dec 31, 2022 | Oct 8, 2022 | Apr 23, 2022 | Dec 31, 2021 | Oct 9, 2021 | Jul 17, 2021 | Apr 24, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jul 11, 2020 | Apr 18, 2020 | Dec 31, 2019 | Oct 5, 2019 | Jul 13, 2019 | Apr 20, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 11,284,210 | 11,292,080 | 11,214,340 | 11,895,070 | 10,872,760 | 11,024,650 | 11,032,730 | 10,996,300 | 10,959,250 | 10,879,950 | 10,731,910 | 10,099,420 | 9,853,800 | 9,623,980 | 9,454,850 | 9,709,010 | 9,701,470 | 9,664,340 | 9,658,740 | 9,580,550 |
| Total current assets | US$ in thousands | 6,377,020 | 6,320,690 | 6,321,320 | 6,196,740 | 6,014,820 | 6,159,720 | 6,057,780 | 6,275,480 | 6,161,260 | 6,221,870 | 6,310,720 | 6,270,000 | 6,437,350 | 6,395,520 | 6,572,000 | 5,695,540 | 5,826,650 | 5,962,470 | 5,781,840 | 6,082,450 |
| Total current liabilities | US$ in thousands | 5,307,400 | 5,216,700 | 5,101,760 | 5,055,350 | 5,420,850 | 5,436,630 | 5,052,570 | 5,180,310 | 4,955,230 | 4,899,340 | 4,792,420 | 4,743,920 | 4,648,890 | 4,437,560 | 4,831,050 | 4,477,700 | 4,463,910 | 4,372,400 | 4,298,880 | 3,885,950 |
| Working capital turnover | 10.55 | 10.23 | 9.20 | 10.42 | 18.31 | 15.25 | 10.98 | 10.04 | 9.09 | 8.23 | 7.07 | 6.62 | 5.51 | 4.92 | 5.43 | 7.97 | 7.12 | 6.08 | 6.51 | 4.36 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $11,284,210K ÷ ($6,377,020K – $5,307,400K)
= 10.55
The working capital turnover ratio for Advance Auto Parts Inc has fluctuated over the past few years, indicating varying efficiencies in utilizing its working capital. In general, a higher working capital turnover ratio suggests that the company is effectively managing its working capital to generate sales.
The ratio experienced a significant increase from 2018 to 2019, peaking at 7.97, which may indicate improved operational efficiency or sales growth during that period. However, the ratio decreased in 2020 before gradually increasing again from 2020 to 2023, reaching a peak of 18.31 in December 2022.
The downward trend from December 2022 to July 2021, followed by a notable increase in the latest data point of December 2023, suggests that Advance Auto Parts Inc may have experienced challenges in efficiently utilizing its working capital in the recent past but has made improvements to enhance this efficiency.
Overall, monitoring the working capital turnover ratio over time provides insights into the company's ability to efficiently manage its working capital to support its operations and generate sales. Further analysis and comparison to industry peers may help in understanding the company's performance in this aspect.
Peer comparison
Dec 31, 2023