CF Industries Holdings Inc (CF)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 5,936,000 | 6,631,000 | 11,186,000 | 6,538,000 | 4,124,000 |
| Total current assets | US$ in thousands | 2,520,000 | 3,050,000 | 3,673,000 | 2,593,000 | 1,367,000 |
| Total current liabilities | US$ in thousands | 818,000 | 800,000 | 995,000 | 1,432,000 | 906,000 |
| Working capital turnover | 3.49 | 2.95 | 4.18 | 5.63 | 8.95 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $5,936,000K ÷ ($2,520,000K – $818,000K)
= 3.49
Based on the data provided, CF Industries Holdings Inc's working capital turnover has shown a declining trend over the years. The working capital turnover ratio reflects how efficiently the company is managing its working capital to generate sales revenue.
In 2020, the working capital turnover was 8.95, indicating that CF Industries efficiently converted its working capital into sales revenue almost 9 times during the year. However, the ratio decreased to 5.63 in 2021, 4.18 in 2022, 2.95 in 2023, and then increased slightly to 3.49 in 2024.
The decreasing trend in working capital turnover could suggest that CF Industries may be facing challenges in managing its working capital efficiently to generate sales. A lower working capital turnover ratio may indicate that the company is not effectively utilizing its current assets to support its sales activities.
It is crucial for CF Industries to closely monitor its working capital management practices and make necessary adjustments to improve its efficiency in converting working capital into sales revenue. Additionally, the company should focus on optimizing its inventory, accounts receivable, and accounts payable levels to enhance its working capital turnover ratio and overall financial performance.
Peer comparison
Dec 31, 2024