Clearwater Paper Corporation (CLW)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,082,800 | 2,080,100 | 1,772,600 | 1,868,600 | 1,761,500 |
| Total current assets | US$ in thousands | 564,100 | 586,300 | 487,200 | 474,900 | 465,800 |
| Total current liabilities | US$ in thousands | 286,000 | 312,000 | 254,100 | 244,800 | 280,400 |
| Working capital turnover | 7.49 | 7.58 | 7.60 | 8.12 | 9.50 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,082,800K ÷ ($564,100K – $286,000K)
= 7.49
Clearwater Paper Corp's working capital turnover has shown a declining trend over the past five years, decreasing from 9.50 in 2019 to 7.49 in 2023. This indicates that the company is generating less revenue relative to its working capital.
A working capital turnover ratio of less than 1 may suggest that the company is inefficient in utilizing its working capital to generate sales. However, Clearwater Paper Corp's ratios are above 1, indicating that the company is efficient in utilizing its working capital to generate sales, although the efficiency has declined over the years.
It is important for Clearwater Paper Corp to closely monitor its working capital turnover ratio to ensure the efficient management of its working capital and to optimize its sales generation capabilities. Further analysis of the company's working capital ratio in conjunction with other financial metrics would provide a more comprehensive view of its overall financial health and operational efficiency.