Central Garden & Pet Company A (CENTA)
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 ratio measures the efficiency of a company in managing its working capital to generate sales. Central Garden & Pet Co.'s working capital turnover has fluctuated over the past five years, ranging from 2.32 to 3.23. A higher turnover ratio indicates that the company is effectively using its working capital to support sales.
The decrease in working capital turnover from 2021 to 2023 suggests a reduction in efficiency in utilizing working capital to generate sales. This could be due to an increase in working capital relative to sales, indicating potential issues with inventory management or accounts receivable collection.
Overall, while Central Garden & Pet Co. has demonstrated reasonable effectiveness in utilizing its working capital to support sales, there may be room for improvement in optimizing the management of its working capital in relation to its sales operations.
Peer comparison
Sep 30, 2023