Boston Scientific Corp (BSX)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 13,975,000 | 12,190,000 | 11,625,000 | 9,552,000 | 10,348,000 |
| Total current assets | US$ in thousands | 6,514,000 | 5,760,000 | 6,317,000 | 6,694,000 | 4,699,000 |
| Total current liabilities | US$ in thousands | 4,933,000 | 3,803,000 | 4,274,000 | 3,681,000 | 4,866,000 |
| Working capital turnover | 8.84 | 6.23 | 5.69 | 3.17 | — |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $13,975,000K ÷ ($6,514,000K – $4,933,000K)
= 8.84
The working capital turnover ratio indicates how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio suggests better utilization of working capital.
Boston Scientific Corp.'s working capital turnover has shown a steady increase over the past five years. In 2023, the ratio stands at 9.01, which indicates that the company generated $9.01 in sales for every dollar of working capital invested. This represents a significant improvement compared to the previous years, where the ratios were 6.48 in 2022, 5.82 in 2021, and 3.29 in 2020.
The increasing trend in the working capital turnover ratio is a positive sign as it shows that Boston Scientific Corp. is becoming more efficient in managing its working capital to support its sales growth. This improved efficiency can result in better profitability and cash flow for the company in the long term. However, it would be beneficial to also consider industry benchmarks and compare the ratio with competitors to gain a better understanding of the company's performance in utilizing its working capital.
Peer comparison
Dec 31, 2023