Armstrong World Industries Inc (AWI)

Working capital turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	1,247,800	1,275,800	1,255,300	1,254,300	1,230,300	1,201,100	1,169,200	1,128,400	1,097,100	1,040,000	994,100	917,000	912,800	958,000	983,200	1,048,400	1,038,100	987,800	973,000	949,300
Total current assets	US$ in thousands	313,000	350,100	362,000	362,000	356,500	351,800	344,400	318,100	321,900	310,300	317,500	316,300	311,800	323,300	320,000	345,400	244,400	296,700	695,600	749,000
Total current liabilities	US$ in thousands	194,500	185,800	176,800	166,300	182,700	212,400	207,200	192,800	209,600	194,300	177,600	156,200	172,300	132,300	156,900	169,800	155,200	142,200	581,500	589,900
Working capital turnover		10.53	7.77	6.78	6.41	7.08	8.62	8.52	9.01	9.77	8.97	7.11	5.73	6.54	5.02	6.03	5.97	11.64	6.39	8.53	5.97

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,247,800K ÷ ($313,000K – $194,500K)
= 10.53

Armstrong World Industries Inc.'s working capital turnover has exhibited fluctuations over the past eight quarters. The working capital turnover ratio measures the efficiency of a company in utilizing its working capital to generate sales revenue. A higher ratio indicates efficient utilization of working capital.

In Q4 2023, the working capital turnover ratio increased significantly to 10.93, indicating that Armstrong World Industries Inc. was able to generate revenue approximately 10.93 times the amount of its working capital during the quarter. This may suggest improved operational efficiency and effective management of working capital.

The ratio then decreased in Q3 2023 to 7.84 but remained relatively high compared to previous quarters. This could imply a slight decrease in efficiency in converting working capital into sales revenue.

Subsequently, in Q2 2023 and Q1 2023, the working capital turnover ratios were 6.83 and 6.44, respectively, showing a downward trend in efficiency compared to the previous two quarters.

Comparing these figures to the ratios in the same quarters of the previous year, there has been some variability. For example, Q4 2023 showed an improvement over Q4 2022 (7.09). Overall, the trend indicates fluctuations in the company's ability to efficiently utilize its working capital to generate sales, which may warrant further investigation into the underlying factors affecting the company's operations and liquidity management.