Topbuild Corp (BLD)
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 | 5,120,910 | 5,099,790 | 5,078,940 | 5,041,270 | 4,951,870 | 4,757,590 | 4,311,639 | 3,878,974 | 3,443,847 | 3,112,824 | 2,961,908 | 2,771,414 | 2,692,863 | 2,633,725 | 2,617,128 | 2,629,892 | 2,595,201 | 2,572,399 | 2,546,712 | 2,502,046 |
| Total current assets | US$ in thousands | 2,049,240 | 1,881,780 | 1,794,600 | 1,612,830 | 1,549,040 | 1,449,530 | 1,354,550 | 1,281,170 | 1,187,690 | 1,068,100 | 952,463 | 960,710 | 936,405 | 926,504 | 837,103 | 782,327 | 779,827 | 789,390 | 748,288 | 704,174 |
| Total current liabilities | US$ in thousands | 771,538 | 753,670 | 758,343 | 751,243 | 789,639 | 788,581 | 801,693 | 777,921 | 733,426 | 584,798 | 543,236 | 514,284 | 496,477 | 485,146 | 471,525 | 471,083 | 476,754 | 482,533 | 458,055 | 451,350 |
| Working capital turnover | 4.01 | 4.52 | 4.90 | 5.85 | 6.52 | 7.20 | 7.80 | 7.71 | 7.58 | 6.44 | 7.24 | 6.21 | 6.12 | 5.97 | 7.16 | 8.45 | 8.56 | 8.38 | 8.77 | 9.90 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $5,120,910K ÷ ($2,049,240K – $771,538K)
= 4.01
The working capital turnover ratio for TopBuild Corp has been consistently decreasing over the past eight quarters, indicating a declining efficiency in the company's ability to utilize its working capital to generate revenue. The ratio has decreased from 7.87 in Q2 2022 to 4.07 in Q4 2023. A lower working capital turnover ratio suggests that the company is taking longer to convert its working capital into sales.
This trend may be concerning as it could signal potential issues with inventory management, accounts receivable collection, or overall liquidity management within the company. A declining working capital turnover ratio could also indicate reduced operational efficiency and potential cash flow constraints.
TopBuild Corp may need to further analyze its working capital components and operational processes to identify areas for improvement and enhance its working capital management. By improving working capital turnover, the company can optimize its resources, enhance liquidity, and ultimately drive profitability.