Badger Meter Inc (BMI)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 707,639 | 566,120 | 505,218 | 425,514 | 424,372 |
| Total current assets | US$ in thousands | 442,177 | 347,832 | 261,360 | 223,688 | 200,094 |
| Total current liabilities | US$ in thousands | 131,948 | 110,312 | 82,146 | 68,036 | 57,247 |
| Working capital turnover | 2.28 | 2.38 | 2.82 | 2.73 | 2.97 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $707,639K ÷ ($442,177K – $131,948K)
= 2.28
Badger Meter Inc.'s working capital turnover has shown a declining trend over the past five years, decreasing from 2.97 in 2019 to 2.27 in 2023. This indicates that the company is generating revenue less efficiently relative to its working capital. A lower working capital turnover suggests that the company is not effectively utilizing its current assets to generate sales revenue.
The decreasing trend in the working capital turnover may signal potential inefficiencies in the management of the company's working capital components, such as inventory, accounts receivable, and accounts payable. It could also indicate challenges in maximizing sales from the available working capital.
Management should closely monitor and analyze the causes of this declining trend to identify areas for improvement in working capital management. Implementing strategies to optimize working capital levels and streamline operational processes could help improve the efficiency of revenue generation in relation to the company's current assets.
Peer comparison
Dec 31, 2023