Dril-Quip Inc (DRQ)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 424,060 | 361,924 | 322,945 | 364,973 | 414,806 |
| Total current assets | US$ in thousands | 719,717 | 750,024 | 745,052 | 863,193 | 880,489 |
| Total current liabilities | US$ in thousands | 117,703 | 87,555 | 93,663 | 85,512 | 96,940 |
| Working capital turnover | 0.70 | 0.55 | 0.50 | 0.47 | 0.53 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $424,060K ÷ ($719,717K – $117,703K)
= 0.70
Dril-Quip, Inc.'s working capital turnover has shown a fluctuating trend over the past five years. The working capital turnover ratio indicates how efficiently the company is using its working capital to generate sales. A higher ratio is generally preferred as it suggests that the company is more effectively utilizing its working capital.
In 2023, the working capital turnover ratio increased to 0.70 from 0.54 in 2022, indicating an improvement in the company's efficiency in managing its working capital to generate sales revenue. This increase suggests that Dril-Quip, Inc. was able to generate more sales revenue for each dollar of working capital invested in the business in 2023 compared to the previous year.
Although the working capital turnover ratio in 2023 is the highest among the five years presented, it is essential to note that there has been some volatility in the ratio over the period, with fluctuations observed year-on-year. This variability may be indicative of changing business conditions or management strategies impacting the company's working capital efficiency.
Overall, the increasing trend in the working capital turnover ratio for Dril-Quip, Inc. from 2019 to 2023 signifies an improvement in the company's ability to efficiently utilize its working capital to support its sales activities. This trend provides insights into the company's operational performance and management of its liquidity and working capital resources.
Peer comparison
Dec 31, 2023