Cleveland-Cliffs Inc (CLF)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 21,996,000 | 22,989,000 | 20,444,000 | 5,354,000 | 1,990,000 |
| Total current assets | US$ in thousands | 6,636,000 | 7,422,000 | 7,653,000 | 5,298,000 | 898,000 |
| Total current liabilities | US$ in thousands | 3,508,000 | 3,549,000 | 3,561,000 | 2,929,000 | 409,000 |
| Working capital turnover | 7.03 | 5.94 | 5.00 | 2.26 | 4.07 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $21,996,000K ÷ ($6,636,000K – $3,508,000K)
= 7.03
The working capital turnover of Cleveland-Cliffs Inc has shown an increasing trend over the past five years, indicating improved efficiency in utilizing its working capital to generate sales revenue. The ratio has consistently increased from 4.07 in 2019 to 7.03 in 2023, suggesting that the company is able to generate approximately $7.03 in sales revenue for every $1 of working capital invested.
This improvement in working capital turnover reflects enhanced operational efficiency and effective management of the company's current assets and liabilities. A higher working capital turnover ratio is generally favorable as it signifies that the company is effectively utilizing its resources to boost sales.
The significant increase in the ratio from 2020 to 2021 and onwards indicates that Cleveland-Cliffs Inc has been more successful in efficiently deploying its working capital to support its revenue-generating activities. This may be attributed to improved inventory management, better accounts receivable collection, or more effective cash flow management practices within the organization.
Overall, the upward trend in the working capital turnover ratio for Cleveland-Cliffs Inc suggests positive operational performance and effectiveness in utilizing its working capital resources to drive revenue growth.
Peer comparison
Dec 31, 2023