BorgWarner Inc (BWA)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 14,198,000 | 12,635,000 | 14,838,000 | 10,165,000 | 10,168,000 |
| Total current assets | US$ in thousands | 6,217,000 | 6,617,000 | 6,597,000 | 6,167,000 | 3,836,000 |
| Total current liabilities | US$ in thousands | 3,767,000 | 4,236,000 | 3,798,000 | 3,810,000 | 2,329,000 |
| Working capital turnover | 5.80 | 5.31 | 5.30 | 4.31 | 6.75 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $14,198,000K ÷ ($6,217,000K – $3,767,000K)
= 5.80
The working capital turnover ratio for BorgWarner Inc has fluctuated over the past five years. In 2023, the ratio stood at 5.80, a decrease from the previous year's figure of 6.64. This indicates that the company generated $5.80 in revenue for every $1 of working capital invested. The decrease in the ratio could be attributed to changes in the efficiency of managing working capital, including inventory, accounts receivable, and accounts payable.
Comparing the 2023 ratio to historical data, we observe that the ratio was higher than that of 2020 and 2021 but lower than that of 2019, which was the highest at 6.75. This suggests that BorgWarner Inc was more effective in utilizing its working capital in generating revenue in 2019 compared to 2023. However, the company's performance improved in 2022, as indicated by the increased ratio of 6.64.
Overall, fluctuations in the working capital turnover ratio can provide insights into the company's efficiency in managing its working capital to generate sales revenue. It is essential for BorgWarner Inc to monitor and analyze these trends to optimize its working capital utilization and improve overall operational efficiency.
Peer comparison
Dec 31, 2023