Alamo Group Inc (ALG)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,689,650 | 1,513,620 | 1,334,220 | 1,163,470 | 1,119,140 |
| Total current assets | US$ in thousands | 803,957 | 727,210 | 612,168 | 515,540 | 570,828 |
| Total current liabilities | US$ in thousands | 213,926 | 190,506 | 192,564 | 157,295 | 162,874 |
| Working capital turnover | 2.86 | 2.82 | 3.18 | 3.25 | 2.74 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,689,650K ÷ ($803,957K – $213,926K)
= 2.86
The working capital turnover of Alamo Group Inc. has shown some fluctuations over the years, ranging from 2.74 in 2019 to 3.37 in 2020. In 2021, the ratio decreased to 3.18 before slightly declining further to 2.82 in 2022. However, there was a slight uptick in 2023, reaching 2.86.
A working capital turnover ratio of less than 1 generally indicates inefficiency in managing working capital, while a higher ratio suggests better efficiency in utilizing working capital to generate sales. In this case, Alamo Group Inc. has demonstrated a relatively efficient use of working capital in generating sales, as the ratios are all above 1.
It is important to note that working capital turnover should be analyzed in conjunction with other financial ratios and qualitative factors to get a comprehensive understanding of the company's overall financial performance and efficiency.
Peer comparison
Dec 31, 2023