Applied Materials Inc (AMAT)
Working capital turnover
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 26,274,000 | 25,590,000 | 22,827,000 | 16,962,000 | 14,608,000 |
| Total current assets | US$ in thousands | 19,147,000 | 15,925,000 | 16,107,000 | 13,369,000 | 10,206,000 |
| Total current liabilities | US$ in thousands | 7,372,000 | 7,379,000 | 6,344,000 | 4,459,000 | 4,447,000 |
| Working capital turnover | 2.23 | 2.99 | 2.34 | 1.90 | 2.54 |
October 29, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $26,274,000K ÷ ($19,147,000K – $7,372,000K)
= 2.23
The working capital turnover ratio measures how efficiently a company is using its working capital to generate sales revenue. A higher ratio indicates better efficiency in utilizing working capital.
Analyzing the working capital turnover of Applied Materials Inc. over the past five years, we observe fluctuations in the ratio. In fiscal year 2023 (ending October 29, 2023), the working capital turnover ratio decreased to 2.25 from 3.02 in the previous year (ending October 30, 2022). This indicates a decline in the efficiency of utilizing working capital to generate sales.
In fiscal year 2021 (ending October 31, 2021), the ratio was 2.36, slightly lower than the previous year, but higher than the current year. This suggests that there was a moderate improvement in working capital efficiency compared to fiscal year 2023. However, in fiscal year 2020 (ending October 25, 2020), the ratio was 1.93, indicating a lower level of efficiency in utilizing working capital.
It is important to note that the working capital turnover ratio for fiscal year 2019 (ending October 27, 2019) was 2.54, which was higher compared to fiscal year 2023 but slightly lower than fiscal year 2022.
Overall, the fluctuation in Applied Materials Inc.'s working capital turnover ratio over the past five years indicates varying levels of efficiency in utilizing working capital to generate sales. Further analysis of the components of working capital, such as accounts receivable, inventory, and accounts payable, would provide deeper insights into the company's working capital management.
Peer comparison
Oct 29, 2023