Avery Dennison Corp (AVY)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,245,300 | 8,955,200 | 8,343,800 | 6,901,500 | 6,984,600 |
| Total current assets | US$ in thousands | 2,796,000 | 2,782,000 | 2,734,600 | 2,416,200 | 2,340,600 |
| Total current liabilities | US$ in thousands | 2,699,500 | 2,799,800 | 2,547,900 | 1,926,000 | 2,253,800 |
| Working capital turnover | 85.44 | — | 44.69 | 14.08 | 80.47 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $8,245,300K ÷ ($2,796,000K – $2,699,500K)
= 85.44
The working capital turnover ratio for Avery Dennison Corp has shown significant fluctuations over the past five years. In 2019, the company had a working capital turnover of 80.47, indicating that it generated $80.47 in revenue for each dollar of working capital invested. This high ratio suggests efficient utilization of working capital to generate sales.
In 2020, the working capital turnover decreased to 14.08, reflecting a significant drop in efficiency in converting working capital into sales. This could indicate either an increase in working capital without a corresponding increase in sales, or a decrease in sales relative to the working capital employed.
The ratio improved in 2021 to 44.69, suggesting better working capital management compared to the previous year. The company was able to generate $44.69 in revenue for each dollar of working capital invested, indicating a more efficient utilization of resources.
However, the most recent data for 2023 shows a significant increase in the working capital turnover ratio to 85.44, indicating a substantial improvement in efficiency in converting working capital into sales compared to the prior year. This may suggest improved working capital management practices or increased sales relative to the working capital employed.
Overall, the fluctuation in the working capital turnover ratio for Avery Dennison Corp over the past five years underscores the importance of effectively managing working capital to optimize operational efficiency and enhance financial performance.
Peer comparison
Dec 31, 2023