Charles River Laboratories (CRL)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	4,082,940	4,098,090	3,457,220	2,939,570	2,582,040
Total current assets	US$ in thousands	1,608,660	1,439,030	1,274,100	1,201,130	1,021,320
Total current liabilities	US$ in thousands	1,055,080	1,091,580	1,033,180	839,751	710,181
Working capital turnover		7.38	11.79	14.35	8.13	8.30

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,082,940K ÷ ($1,608,660K – $1,055,080K)
= 7.38

Charles River Laboratories' working capital turnover has exhibited fluctuations over the past five years. The ratio has ranged from a low of 7.38 in 2023 to a high of 14.35 in 2021. This metric indicates how efficiently the company is utilizing its working capital to generate revenue. A higher working capital turnover ratio is generally preferred as it signifies that the company is effectively managing its working capital to support its operations and generate sales. Conversely, a lower ratio may indicate inefficient use of working capital.

In 2021, Charles River Laboratories achieved a peak working capital turnover ratio of 14.35, indicating a strong ability to convert working capital into revenue during that year. However, this ratio declined in subsequent years, reaching its lowest point of 7.38 in 2023. This downward trend suggests potential challenges in managing working capital effectively in recent years. It may be beneficial for the company to analyze the underlying reasons for this trend and implement strategies to improve working capital efficiency going forward.