Allegheny Technologies Incorporated (ATI)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,050,200 | 3,594,600 | 2,646,300 | 2,858,800 | 4,079,500 |
| Total current assets | US$ in thousands | 2,737,700 | 2,476,400 | 2,306,700 | 2,066,000 | 2,303,000 |
| Total current liabilities | US$ in thousands | 977,100 | 963,900 | 856,400 | 653,300 | 849,200 |
| Working capital turnover | 2.30 | 2.38 | 1.82 | 2.02 | 2.81 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,050,200K ÷ ($2,737,700K – $977,100K)
= 2.30
The working capital turnover of ATI Inc has fluctuated over the past five years. In 2023, the working capital turnover was 2.37, a decrease from the previous year's ratio of 2.54. This suggests that ATI Inc generated $2.37 in net sales for every dollar of working capital invested in the business in 2023.
The decreasing trend in working capital turnover from 2022 to 2023 may indicate that ATI Inc was less efficient in managing its working capital to generate sales during the most recent year. It is essential for the company to assess its working capital management strategies to improve efficiency and maximize sales generation from its working capital resources.
Comparing the 2023 ratio to earlier years, ATI Inc's working capital turnover was also lower than in 2019, when it reached 2.84, the highest in the period. This indicates a decline in the efficiency of the company in utilizing its working capital to generate sales over the years.
Overall, a declining trend in working capital turnover may signal potential inefficiencies in managing working capital and should prompt ATI Inc to review and optimize its working capital management practices to enhance operational performance and profitability in the future.