Dow Inc (DOW)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	44,622,000	56,902,000	54,968,000	38,542,000	42,951,000
Total current assets	US$ in thousands	17,614,000	20,477,000	20,848,000	19,084,000	16,815,000
Total current liabilities	US$ in thousands	9,957,000	11,331,000	13,226,000	11,108,000	10,679,000
Working capital turnover		5.83	6.22	7.21	4.83	7.00

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $44,622,000K ÷ ($17,614,000K – $9,957,000K)
= 5.83

To analyze Dow Inc's working capital turnover, we can see that the company's working capital turnover has fluctuated over the past five years. The working capital turnover ratio measures the efficiency of a company in utilizing its working capital to generate sales.

In 2023, the working capital turnover was 5.83, indicating that for every dollar of working capital, the company generated $5.83 in sales. This represents a decrease from 2022 when the ratio was 6.22. The decreasing ratio could suggest a potential inefficiency in utilizing working capital to generate sales.

Comparing 2023 to 2021, we observe a further decline in the working capital turnover, which was 7.21 in 2021. This could indicate a longer cash conversion cycle or a decrease in sales relative to working capital.

In 2020, the working capital turnover was 4.83, reflecting a decrease from the high of 7.00 in 2019. The decrease in the ratio may signal a decline in sales relative to the working capital, which should be further investigated to understand the underlying causes.

Overall, the fluctuation in Dow Inc's working capital turnover over the years suggests the need for a detailed analysis of the company's working capital management and its impact on sales generation. This analysis will provide insights into the efficiency of the company's working capital utilization and potential areas for improvement.