Cabot Corporation (CBT)
Working capital turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,931,000 | 4,321,000 | 3,409,000 | 2,614,000 | 3,337,000 |
| Total current assets | US$ in thousands | 1,626,000 | 1,820,000 | 1,425,000 | 978,000 | 1,210,000 |
| Total current liabilities | US$ in thousands | 822,000 | 1,105,000 | 1,147,000 | 529,000 | 599,000 |
| Working capital turnover | 4.89 | 6.04 | 12.26 | 5.82 | 5.46 |
September 30, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,931,000K ÷ ($1,626,000K – $822,000K)
= 4.89
The working capital turnover of Cabot Corp. represents the efficiency with which the company utilizes its working capital to generate sales revenue. A higher turnover ratio indicates that the company is efficiently using its working capital to support sales and business operations.
The working capital turnover has fluctuated over the past five years, with a noticeable decline from 2021 to 2022 and then a rebound in 2023. In 2021, the ratio was exceptionally high at 12.26, indicative of the company's ability to effectively convert its working capital into sales. However, this ratio dropped in 2022 to 6.04 before further decreasing to 4.89 in 2023.
The decrease in the working capital turnover in 2022 and 2023 may suggest inefficiencies in utilizing working capital to support sales. It is essential for the company to effectively manage its working capital to maintain optimal levels for supporting operations and growth. Further analysis of the components of working capital and business operations could provide insights into the changes in the working capital turnover ratio.
Peer comparison
Sep 30, 2023