Aramark Holdings (ARMK)

Working capital turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Revenue	US$ in thousands	17,425,800	19,257,800	15,941,600	11,818,400	12,437,600
Total current assets	US$ in thousands	3,406,560	5,220,030	3,291,990	2,898,860	4,675,810
Total current liabilities	US$ in thousands	4,214,210	5,029,970	3,285,890	2,857,430	2,347,460
Working capital turnover		—	101.32	2,613.38	285.26	5.34

September 30, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $17,425,800K ÷ ($3,406,560K – $4,214,210K)
= —

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

Looking at the trend of Aramark Holdings' working capital turnover ratio over the past five years, there appears to be significant variability. In 2020, the working capital turnover ratio was relatively low at 5.34, suggesting that the company was not efficiently utilizing its working capital to generate sales.

However, there was a substantial increase in 2021 to 285.26, indicating a significant improvement in the efficiency of working capital utilization. This sharp increase may have been influenced by changes in the company's operations or financial management strategies.

In 2022, the working capital turnover ratio spiked to 2,613.38, which is abnormally high and may be an anomaly or result of specific accounting factors. Such a high ratio could indicate a distortion in the data or a one-time event that significantly impacted the ratio calculation.

Subsequently, in 2023, the ratio decreased to 101.32, which is still significantly higher than the 2020 level. This could suggest that the company continued to improve its working capital management compared to the initial period but may not have maintained the exceptionally high efficiency seen in 2022.

As the working capital turnover ratio for 2024 is not provided, it is difficult to ascertain the latest trend. However, based on the historical data, it is evident that Aramark Holdings has experienced fluctuations in its working capital turnover, indicating varying levels of efficiency in managing its working capital.

Overall, the analysis of Aramark Holdings' working capital turnover suggests improvements in working capital management efficiency over the years, with some fluctuations possibly due to specific events or changing business circumstances. The company may benefit from maintaining a balance between efficient working capital utilization and ensuring sustainability over the long term.