Armstrong World Industries Inc (AWI)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	1,442,900	1,247,800	1,230,300	1,097,100	912,800
Total current assets	US$ in thousands	348,900	313,000	356,500	321,900	311,800
Total current liabilities	US$ in thousands	249,700	194,500	182,700	209,600	172,300
Working capital turnover		14.55	10.53	7.08	9.77	6.54

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,442,900K ÷ ($348,900K – $249,700K)
= 14.55

Armstrong World Industries Inc has shown a trend of improvement in its working capital turnover over the past five years. The working capital turnover ratio has increased from 6.54 in December 31, 2020, to 14.55 in December 31, 2024. This indicates that the company is becoming more efficient in utilizing its working capital to generate sales revenue.

The surge in the working capital turnover ratio signifies that Armstrong World Industries Inc is managing its current assets and liabilities more effectively to support its operations. The substantial increase in the ratio over the period reflects a positive development in the company's liquidity management and operational efficiency. This enhanced efficiency can lead to improved cash flow and profitability for the company.

Overall, the strong upward trend in Armstrong World Industries Inc's working capital turnover ratio showcases the company's ability to optimize its working capital resources efficiently over the years, which can result in better financial performance and sustainable growth.