Albemarle Corp (ALB)

Working capital turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Revenue (ttm)	US$ in thousands	5,377,520	6,501,970	7,457,880	8,397,690	9,617,200	9,882,020	9,663,220	8,772,620	7,320,100	5,593,324	4,332,090	3,626,396	3,327,957	3,312,900	3,229,202	3,219,355	3,128,909	3,242,326	3,375,205	3,496,208
Total current assets	US$ in thousands	3,842,260	4,669,610	5,225,700	5,822,720	5,216,920	7,125,560	7,454,780	6,657,580	5,186,920	4,296,970	3,350,100	2,336,480	1,993,680	2,078,110	2,151,350	2,009,390	2,206,180	2,227,010	2,292,410	2,155,180
Total current liabilities	US$ in thousands	1,966,460	1,910,720	1,958,460	2,050,700	3,560,460	3,941,610	4,291,510	3,505,370	2,741,020	2,487,950	1,781,760	2,103,340	1,874,340	1,591,040	984,928	953,256	1,801,850	1,612,740	1,420,800	1,192,930
Working capital turnover		2.87	2.36	2.28	2.23	5.81	3.10	3.05	2.78	2.99	3.09	2.76	15.55	27.89	6.80	2.77	3.05	7.74	5.28	3.87	3.63

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $5,377,520K ÷ ($3,842,260K – $1,966,460K)
= 2.87

Albemarle Corp's working capital turnover ratio has shown fluctuating values over the past 5 years, indicating variations in the efficiency of utilizing its working capital to generate sales revenue. The working capital turnover ratio measures how efficiently a company is using its working capital to support its sales activity.

In December 2021, the working capital turnover ratio spiked significantly to 27.89, suggesting a substantial improvement in the company's ability to generate sales relative to its working capital. This could indicate more effective management of inventory, receivables, and payables during that period.

However, in the subsequent quarters, the ratio experienced a notable decline, dropping to 15.55 in March 2022, then falling further to 2.76 in June 2022. These declines imply a potential decrease in sales generated per unit of working capital or inefficiencies in managing the company's short-term assets and liabilities.

The ratio fluctuated around the 3 mark for most of the subsequent quarters until December 2023, where it increased to 5.81, indicating improved efficiency in utilizing working capital to support sales. However, a decrease was observed in March 2024, where the ratio dropped to 2.23, suggesting a potential inefficiency in working capital management.

Overall, the trend in Albemarle Corp's working capital turnover ratio highlights the importance of effective working capital management in supporting revenue generation. Fluctuations in this ratio can indicate changes in operational efficiency, liquidity management, and the company's ability to meet short-term obligations while maximizing sales potential.