Acuity Brands Inc (AYI)
Working capital turnover
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,835,700 | 3,913,100 | 3,981,400 | 3,461,000 | 3,326,300 |
| Total current assets | US$ in thousands | 1,871,500 | 1,395,200 | 1,466,000 | 1,544,300 | 1,439,700 |
| Total current liabilities | US$ in thousands | 687,900 | 595,400 | 733,600 | 692,200 | 617,600 |
| Working capital turnover | 3.24 | 4.89 | 5.44 | 4.06 | 4.05 |
August 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,835,700K ÷ ($1,871,500K – $687,900K)
= 3.24
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio indicates better efficiency in managing working capital.
Analyzing the trend in Acuity Brands Inc's working capital turnover ratio over the past five years, we observe a fluctuating pattern. The ratio decreased from 4.05 in 2020 to 4.06 in 2021, before experiencing a significant increase to 5.44 in 2022. However, it then dropped to 4.89 in 2023 and further declined to 3.24 in 2024.
The declining trend in the working capital turnover ratio could suggest inefficiencies in working capital management or potentially slower sales growth compared to the investment in working capital. A lower ratio may indicate that the company is tying up excessive capital in its operations relative to the level of sales being generated.
It is important for Acuity Brands Inc to closely monitor and improve its working capital turnover ratio to ensure optimal utilization of resources and enhance overall operational efficiency. Additionally, further analysis of the company's working capital components and sales trends could provide deeper insights into the reasons behind the fluctuating ratios and aid in implementing strategic measures to improve working capital management.
Peer comparison
Aug 31, 2024