Smith AO Corporation (AOS)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,840,800 | 3,744,500 | 3,534,600 | 2,888,000 | 2,981,700 |
| Total current assets | US$ in thousands | 1,500,300 | 1,633,700 | 1,752,600 | 1,618,000 | 1,500,400 |
| Total current liabilities | US$ in thousands | 945,300 | 934,200 | 1,118,800 | 886,300 | 766,500 |
| Working capital turnover | 6.92 | 5.35 | 5.58 | 3.95 | 4.06 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,840,800K ÷ ($1,500,300K – $945,300K)
= 6.92
The working capital turnover of A.O. Smith Corp. has shown a fluctuating trend over the past five years. The ratio increased from 4.08 in 2019 to 5.58 in 2021 before slightly decreasing to 5.37 in 2022. However, there was a notable improvement in 2023, reaching 6.94.
A higher working capital turnover ratio indicates that the company is able to efficiently utilize its working capital to generate sales revenue. This improvement in efficiency could be attributed to better inventory management, faster cash conversion cycle, or more effective accounts receivable and accounts payable management.
Overall, the increasing trend in working capital turnover for A.O. Smith Corp. suggests that the company has been able to enhance its operational efficiency and effectively manage its working capital resources in recent years.
Peer comparison
Dec 31, 2023