Central Garden & Pet Company A (CENTA)
Working capital turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,200,460 | 3,310,100 | 3,338,590 | 3,303,680 | 2,695,510 |
| Total current assets | US$ in thousands | 1,886,810 | 1,707,120 | 1,553,850 | 1,543,660 | 1,525,280 |
| Total current liabilities | US$ in thousands | 515,384 | 457,987 | 465,892 | 522,319 | 440,262 |
| Working capital turnover | 2.33 | 2.65 | 3.07 | 3.23 | 2.48 |
September 30, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,200,460K ÷ ($1,886,810K – $515,384K)
= 2.33
The working capital turnover ratio of Central Garden & Pet Company A has exhibited a decreasing trend over the past five years, declining from 3.23 in September 2021 to 2.33 in September 2024. This trend indicates that the company is taking longer to convert its working capital into revenue, which could suggest potential inefficiencies in managing its current assets and liabilities.
A working capital turnover ratio below 1 would indicate that the company is not efficiently utilizing its working capital to generate revenue, while a ratio above 1 signifies that the company is effectively using its working capital to generate sales. In this case, the ratios ranging from 2.33 to 3.23 over the five-year period suggest that the company has generally been able to efficiently convert its working capital into sales revenue, although the decreasing trend raises concerns about a potential deterioration in efficiency over time.
Overall, Central Garden & Pet Company A should monitor its working capital turnover ratio closely to ensure optimal management of its current assets and liabilities, aiming to strike a balance between maintaining liquidity and maximizing revenue generation.
Peer comparison
Sep 30, 2024