Adient PLC (ADNT)
Working capital turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 15,395,000 | 14,121,000 | 13,680,000 | 12,670,000 | 16,526,000 |
| Total current assets | US$ in thousands | 4,316,000 | 4,163,000 | 5,086,000 | 4,482,000 | 4,116,000 |
| Total current liabilities | US$ in thousands | 3,738,000 | 3,501,000 | 3,511,000 | 3,819,000 | 3,835,000 |
| Working capital turnover | 26.63 | 21.33 | 8.69 | 19.11 | 58.81 |
September 30, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $15,395,000K ÷ ($4,316,000K – $3,738,000K)
= 26.63
The working capital turnover ratio measures how efficiently a company is using its working capital to generate sales. A higher ratio indicates that the company is effectively utilizing its working capital, while a lower ratio may suggest inefficiency.
Looking at the working capital turnover of Adient plc over the past five years, the trend shows some fluctuations. In 2019, the working capital turnover was at a relatively high level of 58.81, indicating robust efficiency in managing its working capital to generate sales. However, in 2021, the ratio dropped significantly to 8.69, suggesting a decrease in the efficiency of working capital utilization.
The ratio then improved in 2022 to 21.33, but still remained below the 2019 level. However, in 2023, there was a substantial increase to 26.63, indicating a significant improvement in the company's ability to utilize its working capital to drive sales.
This fluctuation in the working capital turnover ratio may indicate changes in Adient's working capital management over the years, which could have been influenced by factors such as inventory management, accounts receivables collection, and accounts payable management.
It is important for Adient to monitor and manage its working capital effectively to ensure optimal utilization, as it directly impacts the company's liquidity and operational efficiency. Further analysis into the specific components of working capital, such as inventory turnover and receivables collection period, would provide deeper insights into the company's working capital management effectiveness.
Peer comparison
Sep 30, 2023