Domino’s Pizza Inc (DPZ)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,479,360 | 4,537,160 | 4,357,370 | 4,117,410 | 3,618,770 |
| Total current assets | US$ in thousands | 817,291 | 790,654 | 860,540 | 869,384 | 787,617 |
| Total current liabilities | US$ in thousands | 547,350 | 536,621 | 590,741 | 470,819 | 453,831 |
| Working capital turnover | 16.59 | 17.86 | 16.15 | 10.33 | 10.84 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,479,360K ÷ ($817,291K – $547,350K)
= 16.59
Dominos Pizza Inc's working capital turnover ratio has fluctuated over the past five years, ranging from 10.33 to 17.86. The ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue. A higher turnover ratio signifies that Dominos is effectively managing its working capital to generate sales, whereas a lower ratio may indicate inefficiencies in working capital management.
The trend in the working capital turnover ratio shows some variability, with a peak in 2023 at 17.86 and a subsequent decrease to 16.59 in 2023. This suggests a slight decline in the efficiency of utilizing working capital to generate sales revenue. However, in comparison to the ratios in 2021 and 2019, the company's working capital turnover has generally improved, indicating a more efficient use of working capital over the years.
It is important for Dominos Pizza Inc to continue monitoring and analyzing its working capital turnover ratio to ensure optimal utilization of working capital resources and maximize sales efficiency. An effective working capital management strategy can help the company maintain liquidity, meet short-term obligations, and support long-term growth and profitability.
Peer comparison
Dec 31, 2023