Central Garden & Pet Company (CENT)
Working capital turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,310,080 | 3,338,590 | 3,303,680 | 2,695,510 | 2,383,000 |
| Total current assets | US$ in thousands | 1,707,120 | 1,553,850 | 1,543,660 | 1,525,280 | 1,307,190 |
| Total current liabilities | US$ in thousands | 457,987 | 465,892 | 522,319 | 440,262 | 278,525 |
| Working capital turnover | 2.65 | 3.07 | 3.23 | 2.48 | 2.32 |
September 30, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,310,080K ÷ ($1,707,120K – $457,987K)
= 2.65
The working capital turnover of Central Garden & Pet Co. has shown fluctuations over the past five years. The ratio indicates the efficiency with which the company is utilizing its working capital to generate sales revenue. A higher ratio is generally favorable as it suggests that the company is able to efficiently generate sales using its working capital.
In 2023, the working capital turnover decreased to 2.65 from 3.07 in 2022, indicating a decline in the efficiency of the company's working capital utilization to generate sales. However, it is important to note that the 2023 ratio remains above the 2019 and 2020 levels, signifying improved efficiency over that period.
The variations in the working capital turnover may be attributed to changes in the company's inventory management, accounts receivable, and accounts payable. It is essential for stakeholders to monitor this ratio closely to assess the company's effectiveness in managing its working capital in relation to its sales generation.
Peer comparison
Sep 30, 2023