AGCO Corporation (AGCO)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 14,407,800 | 25,289,800 | 22,269,900 | 18,284,400 | 18,062,900 |
| Total current assets | US$ in thousands | 6,340,800 | 5,739,300 | 5,014,100 | 4,368,400 | 3,729,100 |
| Total current liabilities | US$ in thousands | 4,343,600 | 4,088,000 | 3,454,600 | 3,362,800 | 2,884,500 |
| Working capital turnover | 7.21 | 15.32 | 14.28 | 18.18 | 21.39 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $14,407,800K ÷ ($6,340,800K – $4,343,600K)
= 7.21
AGCO Corp.'s working capital turnover has exhibited a declining trend over the past five years, decreasing from 10.70 in 2019 to 7.22 in 2023. A working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue, and a higher ratio indicates better efficiency.
The decreasing trend in the working capital turnover may suggest that the company's ability to generate sales revenue from its working capital has slightly weakened over time. This could potentially be due to changes in the company's operating cycle, inventory management, or accounts receivable collection efficiency.
Although the working capital turnover has decreased, it still remains above 7 in recent years, indicating that AGCO Corp. is utilizing its working capital effectively to generate revenue. However, management may need to closely monitor and analyze the reasons behind the declining trend to identify areas for improvement in working capital management and operational efficiency.
Peer comparison
Dec 31, 2023