Cogent Communications Group Inc (CCOI)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 833,927 | 563,244 | 555,263 | 470,867 | 492,038 |
| Total current assets | US$ in thousands | 513,627 | 365,913 | 409,577 | 456,337 | 475,728 |
| Total current liabilities | US$ in thousands | 373,324 | 120,284 | 81,010 | 94,443 | 89,694 |
| Working capital turnover | 5.94 | 2.29 | 1.69 | 1.30 | 1.27 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $833,927K ÷ ($513,627K – $373,324K)
= 5.94
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate revenue. A higher ratio indicates better utilization of working capital.
Cogent Communications Holdings Inc's working capital turnover has shown a consistent improvement over the past five years. In 2019, the ratio was 1.41, and it has steadily increased to 6.71 in 2023. This suggests that the company has been able to generate more revenue per dollar of working capital as the ratio has increased significantly.
The substantial increase in the working capital turnover ratio indicates that Cogent Communications has become more efficient in managing its working capital resources to drive revenue growth. This may be attributed to better inventory management, improved accounts receivable collection, and effective cash flow management.
Overall, the trend in the working capital turnover ratio for Cogent Communications Holdings Inc reflects positively on the company's operational efficiency and financial performance over the past five years.
Peer comparison
Dec 31, 2023