Ametek Inc (AME)

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 6,941,170 6,910,450 6,824,730 6,736,010 6,596,950 6,491,740 6,420,690 6,289,130 6,150,530 6,028,600 5,917,490 5,789,290 5,546,510 5,241,720 4,927,980 4,553,550 4,540,030 4,645,900 4,795,590 5,073,080
Total current assets US$ in thousands 2,603,030 2,733,690 2,767,240 2,775,500 2,824,670 3,118,700 2,899,560 2,665,940 2,528,060 2,432,570 2,411,610 2,272,820 2,128,760 2,061,820 2,042,080 2,573,490 2,522,470 2,643,020 2,517,140 2,774,490
Total current liabilities US$ in thousands 2,098,590 1,966,920 2,203,050 2,502,510 2,882,570 1,673,720 1,341,190 1,452,670 1,564,200 1,591,380 1,633,030 1,590,740 1,563,310 1,633,830 1,857,630 1,138,460 1,075,920 1,403,490 1,017,450 1,477,670
Working capital turnover 13.76 9.01 12.10 24.67 — 4.49 4.12 5.18 6.38 7.17 7.60 8.49 9.81 12.25 26.72 3.17 3.14 3.75 3.20 3.91

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $6,941,170K ÷ ($2,603,030K – $2,098,590K)
= 13.76

The working capital turnover ratio measures how efficiently a company is able to generate revenue from its working capital. A higher turnover ratio indicates that the company is effectively utilizing its working capital to generate sales.

Analyzing the working capital turnover of Ametek Inc over the past few years, we see fluctuations in the ratio. From March 31, 2020, to June 30, 2021, the ratio remained relatively stable, ranging from 3.14 to 26.72. This suggests that during this period, the company was efficiently converting its working capital into sales.

However, from June 30, 2021, to December 31, 2023, the working capital turnover ratio decreased steadily, indicating a decline in the efficiency of working capital utilization. This could be a concern as it may imply that the company is not effectively managing its working capital to generate sales.

The spike in the working capital turnover ratio on March 31, 2024 (24.67) followed by a subsequent decrease in the ratio in the following quarters may indicate some irregularities or anomalies in the company's financial operations during that period.

Overall, a declining trend in the working capital turnover ratio for Ametek Inc raises questions about the company's operational efficiency and the management of its working capital. Further analysis and investigation into the underlying reasons for these fluctuations would be necessary to understand the company's financial health and potential areas of improvement.