Archer-Daniels-Midland Company (ADM)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 93,935,000 | 101,556,000 | 85,249,000 | 64,355,000 | 64,656,000 |
| Total current assets | US$ in thousands | 29,767,000 | 35,410,000 | 31,909,000 | 27,286,000 | 21,347,000 |
| Total current liabilities | US$ in thousands | 18,662,000 | 24,191,000 | 21,948,000 | 18,182,000 | 13,734,000 |
| Working capital turnover | 8.46 | 9.05 | 8.56 | 7.07 | 8.49 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $93,935,000K ÷ ($29,767,000K – $18,662,000K)
= 8.46
Archer-Daniels-Midland Company's working capital turnover has shown fluctuating trends over the past five years. The working capital turnover ratio measures a company's efficiency in managing its working capital to generate revenue. A higher ratio typically indicates that the company is generating more revenue per dollar of working capital.
In 2022, the company achieved the highest working capital turnover of 9.05, indicating a substantial improvement in the efficiency of utilizing its working capital to generate revenue. However, in 2023, the ratio slightly decreased to 8.46, suggesting a slight dip in efficiency compared to the previous year.
Despite the fluctuations, the company has generally maintained a strong working capital turnover ratio above 8 in the last five years, except for 2020 when it decreased to 7.07. This suggests that Archer-Daniels-Midland Company has been effectively managing its working capital to generate revenue efficiently over the years.
Overall, the company's working capital turnover ratio reflects a reasonably efficient use of working capital to drive revenue generation, albeit with some variation from year to year.
Peer comparison
Dec 31, 2023