Commercial Metals Company (CMC)
Working capital turnover
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,759,230 | 9,122,140 | 6,669,820 | 5,420,640 | 5,761,080 |
| Total current assets | US$ in thousands | 3,144,160 | 3,441,470 | 2,736,830 | 2,214,100 | 2,080,000 |
| Total current liabilities | US$ in thousands | 843,714 | 1,356,990 | 980,473 | 745,263 | 694,590 |
| Working capital turnover | 3.81 | 4.38 | 3.80 | 3.69 | 4.16 |
August 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $8,759,230K ÷ ($3,144,160K – $843,714K)
= 3.81
The working capital turnover ratio measures how efficiently a company is using its working capital to generate sales revenue. Commercial Metals Co.'s working capital turnover over the past five years has shown fluctuations. In 2023, the ratio stood at 3.83, signaling a decrease from 4.28 in 2022. However, it surpassed the 2020 and 2021 figures of 3.73 and 3.83, respectively. In 2019, the ratio reached its highest point at 4.21.
The declining trend in the working capital turnover ratio may indicate inefficiency in utilizing working capital to generate sales. It is essential for the company to assess and improve its management of working capital to enhance operational efficiency and overall financial performance.
Peer comparison
Aug 31, 2023