Emerson Electric Company (EMR)
Working capital turnover
Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
---|---|---|---|---|---|---|
Revenue | US$ in thousands | 17,435,000 | 15,115,000 | 19,622,000 | 18,267,000 | 16,785,000 |
Total current assets | US$ in thousands | 10,192,000 | 13,819,000 | 8,506,000 | 8,432,000 | 8,806,000 |
Total current liabilities | US$ in thousands | 5,742,000 | 5,032,000 | 7,777,000 | 6,246,000 | 5,785,000 |
Working capital turnover | 3.92 | 1.72 | 26.92 | 8.36 | 5.56 |
September 30, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $17,435,000K ÷ ($10,192,000K – $5,742,000K)
= 3.92
Emerson Electric Company's working capital turnover has fluctuated significantly over the past five years. In 2024, the working capital turnover ratio was 3.92, indicating that the company generated 3.92 times its working capital in sales revenue during the year. This represents a notable improvement compared to the previous year when the ratio was 1.72.
The working capital turnover ratio was exceptionally high in 2022 at 26.92, reflecting a substantial increase in efficiency in utilizing its working capital to generate sales. However, this could be an outlier and should be further investigated to understand the underlying reasons for such a significant spike.
In 2021 and 2020, the working capital turnover ratios were 8.36 and 5.56, respectively, showing a consistently strong performance in efficiently utilizing working capital to drive sales.
Overall, Emerson Electric Company's working capital turnover has demonstrated variability over the years, with significant fluctuations in efficiency. It is important to monitor this ratio closely to assess the company's ability to efficiently generate sales with its available working capital.
Peer comparison
Sep 30, 2024