Now Inc (DNOW)
Working capital turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 2,319,000 | 2,310,000 | 2,299,000 | 2,244,000 | 2,133,000 | 2,021,000 | 1,883,000 | 1,744,000 | 1,632,000 | 1,520,000 | 1,407,000 | 1,377,000 | 1,620,000 | 1,939,000 | 2,364,000 | 2,770,000 | 2,951,000 | 3,076,000 | 3,147,000 | 3,148,000 |
| Total current assets | US$ in thousands | 1,068,000 | 1,033,000 | 1,075,000 | 1,025,000 | 1,017,000 | 1,054,000 | 969,000 | 946,000 | 883,000 | 874,000 | 831,000 | 882,000 | 861,000 | 878,000 | 898,000 | 1,020,000 | 1,067,000 | 1,148,000 | 1,195,000 | 1,252,000 |
| Total current liabilities | US$ in thousands | 418,000 | 423,000 | 501,000 | 447,000 | 439,000 | 458,000 | 408,000 | 395,000 | 369,000 | 375,000 | 341,000 | 298,000 | 272,000 | 264,000 | 278,000 | 385,000 | 396,000 | 470,000 | 468,000 | 475,000 |
| Working capital turnover | 3.57 | 3.79 | 4.01 | 3.88 | 3.69 | 3.39 | 3.36 | 3.17 | 3.18 | 3.05 | 2.87 | 2.36 | 2.75 | 3.16 | 3.81 | 4.36 | 4.40 | 4.54 | 4.33 | 4.05 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,319,000K ÷ ($1,068,000K – $418,000K)
= 3.57
Working capital turnover represents how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is effectively managing its working capital to support its sales activities.
Analyzing the trend of NOW Inc's working capital turnover over the various quarters, we observe that the ratio has fluctuated within a range of 3.17 to 4.01. In Q2 2023, NOW Inc achieved its highest working capital turnover ratio of 4.01, indicating that the company effectively used its working capital to generate sales revenue during that period.
Overall, the trend shows that NOW Inc has maintained a relatively stable working capital turnover ratio over the quarters, indicating a consistent level of efficiency in utilizing its working capital to support its sales operations. The company's ability to maintain a working capital turnover ratio above 3.0 in most quarters suggests effective management of its working capital in generating sales.
However, it is important to note that a high working capital turnover ratio may also indicate aggressive management of working capital, which could potentially lead to liquidity issues if not managed carefully. Therefore, further analysis of NOW Inc's cash conversion cycle and overall liquidity position is recommended to provide a more comprehensive assessment of the company's financial health.
Peer comparison
Dec 31, 2023