Ecolab Inc (ECL)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	15,483,100	14,402,400	12,885,600	11,764,600	15,132,300
Total current assets	US$ in thousands	5,644,100	5,494,200	4,687,100	5,117,400	4,828,400
Total current liabilities	US$ in thousands	4,345,800	4,210,400	3,553,200	2,932,200	3,630,600
Working capital turnover		11.93	11.22	11.36	5.38	12.63

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $15,483,100K ÷ ($5,644,100K – $4,345,800K)
= 11.93

The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. Looking at Ecolab, Inc.'s working capital turnover over the past five years, we observe fluctuations in the ratio.

In 2023, the working capital turnover ratio was 11.80, indicating that Ecolab converted its working capital into sales nearly 12 times during the year. This was a slight increase from the previous year, suggesting improved efficiency in utilizing its working capital.

In 2022 and 2021, the ratios were 11.05 and 11.23, respectively, showing consistent performance in efficiently utilizing working capital to generate revenue.

However, in 2020, the ratio dropped significantly to 5.40, indicating a temporary decrease in the efficiency of working capital utilization. This could be a result of various factors such as economic conditions, company operations, or management decisions.

The ratio rebounded in 2019 to 12.44, signaling a return to strong efficiency in converting working capital into sales revenue.

Overall, Ecolab maintained a relatively high working capital turnover ratio over the period, reflecting effective management of its working capital in generating sales. It's important to further analyze the underlying reasons for the fluctuations in the ratio, as they could provide insights into the company's operational performance and financial health.