Ametek Inc (AME)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	6,515,160	6,070,930	5,472,480	4,594,990	5,070,080
Total current assets	US$ in thousands	2,824,670	2,528,060	2,128,760	2,522,470	2,025,770
Total current liabilities	US$ in thousands	2,882,570	1,564,200	1,563,310	1,075,920	1,425,860
Working capital turnover		—	6.30	9.68	3.18	8.45

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $6,515,160K ÷ ($2,824,670K – $2,882,570K)
= —

Working capital turnover is a financial ratio that measures how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is effectively managing its working capital to support its sales activities.

Examining the trend of Ametek Inc's working capital turnover over the past five years, it is evident that there have been fluctuations in the ratio. In 2023, the working capital turnover ratio was not available in the provided data. In 2022, the ratio was 6.38, which decreased from the previous year, indicating a decline in the efficiency of utilizing working capital to generate sales.

However, in 2021, the working capital turnover ratio significantly improved to 9.81, signaling a notable increase in the efficiency of working capital utilization. This improvement suggests that Ametek Inc was able to generate more sales revenue per unit of working capital invested in the business during that year.

In 2020, the ratio dropped to 3.14, reflecting a decrease in efficiency compared to the previous year. Despite this decline, the ratio in 2020 was still higher than in 2019 when it was 8.60, indicating a decrease in efficiency during 2020 but still a relatively strong performance compared to the previous year.

Overall, the fluctuations in Ametek Inc's working capital turnover ratio suggest varying levels of efficiency in utilizing working capital to drive sales over the past five years. It is essential for the company to closely monitor this ratio and implement strategies to improve working capital management efficiency to support sustainable growth and profitability.