Carter’s Inc (CRI)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	2,911,830	3,150,090	3,425,780	2,967,910	3,519,290
Total current assets	US$ in thousands	1,101,240	1,188,720	1,899,720	1,946,020	1,107,760
Total current liabilities	US$ in thousands	511,862	528,949	717,231	792,532	475,500
Working capital turnover		4.94	4.77	2.90	2.57	5.57

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,911,830K ÷ ($1,101,240K – $511,862K)
= 4.94

Working capital turnover is a financial ratio that measures how efficiently a company is using its working capital to generate revenue. A higher working capital turnover indicates that the company is effectively utilizing its current assets to support its sales.

Looking at the historical trend of Carter’s Inc's working capital turnover, we observe a fluctuation over the last five years. In 2019, the working capital turnover was the highest at 5.57, indicating a strong efficiency in utilizing working capital to generate sales. However, there was a significant drop in 2021 to 2.90, suggesting a potential decrease in efficiency in managing working capital during that period.

In 2022 and 2023, the working capital turnover increased to 4.77 and 4.94, respectively, indicating an improvement in utilizing working capital efficiently to support revenue generation. This upward trend is a positive sign for Carter’s Inc as it suggests a better management of current assets to drive sales.

Overall, it is essential for Carter’s Inc to maintain and improve its working capital turnover ratio to ensure optimal utilization of working capital resources and to support sustainable revenue growth in the future.