Alamo Group Inc (ALG)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,628,510 | 1,689,650 | 1,513,620 | 1,334,220 | 1,163,470 |
| Total current assets | US$ in thousands | 857,495 | 803,957 | 727,210 | 612,168 | 503,010 |
| Total current liabilities | US$ in thousands | 190,309 | 213,926 | 190,506 | 192,564 | 157,295 |
| Working capital turnover | 2.44 | 2.86 | 2.82 | 3.18 | 3.37 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,628,510K ÷ ($857,495K – $190,309K)
= 2.44
The working capital turnover for Alamo Group Inc has shown a gradual decline over the five-year period from 2020 to 2024. Starting at 3.37 in 2020, the ratio decreased to 3.18 in 2021, further dropping to 2.82 in 2022. While there was a slight uptick to 2.86 in 2023, the ratio fell to 2.44 by the end of 2024.
This trend indicates that the company may be becoming less efficient in its ability to generate sales revenue relative to its working capital resources. A decreasing working capital turnover ratio could suggest inefficiencies in managing the company's working capital components, such as inventory, accounts receivable, and accounts payable.
It is important for Alamo Group Inc to closely monitor its working capital turnover ratio and address any underlying issues that may be impacting its efficiency in utilizing working capital effectively to support its sales activities.
Peer comparison
Dec 31, 2024