Now Inc (DNOW)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,373,000 | 2,321,000 | 2,136,000 | 1,632,000 | 1,619,000 |
| Total current assets | US$ in thousands | 1,028,000 | 1,068,000 | 1,017,000 | 883,000 | 861,000 |
| Total current liabilities | US$ in thousands | 442,000 | 418,000 | 439,000 | 369,000 | 272,000 |
| Working capital turnover | 4.05 | 3.57 | 3.70 | 3.18 | 2.75 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,373,000K ÷ ($1,028,000K – $442,000K)
= 4.05
Working capital turnover is a key financial ratio that measures a company's efficiency in managing its working capital to generate sales revenue. The trend analysis of Now Inc's working capital turnover shows a consistent improvement over the past five years.
In December 31, 2020, the working capital turnover ratio was 2.75, indicating that the company generated $2.75 in sales for every dollar of working capital invested. Over the subsequent years, the ratio increased steadily to 3.18 in December 31, 2021, 3.70 in December 31, 2022, 3.57 in December 31, 2023, and finally reached 4.05 by December 31, 2024.
This trend suggests that Now Inc has been able to effectively utilize its working capital to support its sales growth and operational activities. A higher working capital turnover ratio reflects a more efficient use of working capital, which may indicate better inventory management, faster collection of receivables, and more effective payment of payables.
Overall, the increasing trend in Now Inc's working capital turnover ratio signals improved efficiency in managing working capital resources and generating sales, which could lead to enhanced profitability and financial performance in the future.
Peer comparison
Dec 31, 2024