Avantor Inc (AVTR)

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 6,783,600 6,819,800 6,825,600 6,866,700 6,967,200 7,039,400 7,175,700 7,342,300 7,512,400 7,625,000 7,602,800 7,550,900 7,386,100 7,269,400 7,040,100 6,660,200 6,393,600 6,126,700 6,025,500 6,079,200
Total current assets US$ in thousands 2,146,600 2,504,700 2,329,200 2,321,100 2,384,900 2,384,800 2,499,100 2,627,300 2,657,900 2,560,100 2,571,500 2,606,300 2,477,200 3,564,600 2,422,700 2,232,000 2,230,900 2,296,800 2,292,300 2,196,600
Total current liabilities US$ in thousands 2,007,500 1,629,800 1,464,600 1,441,900 1,480,300 1,488,100 1,550,100 1,669,500 1,658,800 1,551,900 1,571,300 1,447,100 1,450,800 1,320,100 1,377,700 1,240,700 1,242,700 1,136,000 1,053,700 1,126,600
Working capital turnover 48.77 7.79 7.89 7.81 7.70 7.85 7.56 7.67 7.52 7.56 7.60 6.51 7.20 3.24 6.74 6.72 6.47 5.28 4.86 5.68

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $6,783,600K ÷ ($2,146,600K – $2,007,500K)
= 48.77

Avantor Inc's working capital turnover has shown fluctuating trends over the past few years. The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue.

From March 2020 to September 2021, Avantor Inc's working capital turnover ratio steadily increased from 5.68 to 6.74. This indicates that the company was able to generate more sales revenue for each unit of working capital invested during this period.

However, there was a significant drop in the ratio in September 2021 to 3.24, signaling a potential inefficiency in utilizing working capital to generate revenue. This drop may warrant further investigation into the company's working capital management practices during that period.

Subsequently, Avantor Inc's working capital turnover ratio recovered and remained relatively stable, ranging from 6.51 to 7.85 from March 2022 to September 2023. These figures suggest that the company improved its working capital efficiency and maintained a consistent ability to generate revenue relative to its working capital investment.

In December 2024, there was a notable spike in the working capital turnover ratio to 48.77, which may indicate an anomaly or unusual event that significantly impacted the ratio. It would be important for stakeholders to understand the reason behind this large increase and assess its implications on the company's financial performance.

Overall, while Avantor Inc has shown fluctuations in its working capital turnover ratio over the years, the general trend indicates an improvement in efficiency in utilizing working capital to generate sales revenue, with some anomalies that may require deeper analysis.