Ethan Allen Interiors Inc (ETD)

Working capital turnover

Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019
Revenue (ttm) US$ in thousands 646,141 664,729 704,624 740,509 791,146 1,224,074 1,235,417 1,240,349 1,208,177 766,074 745,377 716,110 684,846 598,414 571,226 566,974 589,837 682,187 710,242 732,820
Total current assets US$ in thousands 332,683 326,310 325,959 352,798 359,453 351,949 338,406 351,694 346,749 340,849 316,244 300,842 295,279 291,120 245,928 232,461 229,952 287,328 199,440 232,831
Total current liabilities US$ in thousands 153,696 156,109 140,930 164,942 163,097 174,356 175,715 208,290 215,643 230,437 222,817 232,767 223,902 225,946 187,478 187,889 138,978 146,863 137,442 159,899
Working capital turnover 3.61 3.91 3.81 3.94 4.03 6.89 7.59 8.65 9.22 6.94 7.98 10.52 9.59 9.18 9.77 12.72 6.48 4.86 11.46 10.05

June 30, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $646,141K ÷ ($332,683K – $153,696K)
= 3.61

The working capital turnover ratio for Ethan Allen Interiors Inc has fluctuated over the past few quarters, ranging from a low of 3.61 to a high of 12.72. This ratio measures how efficiently the company is utilizing its working capital to generate sales revenue.

A higher working capital turnover ratio indicates that the company is effectively managing its working capital to support sales growth. In this case, we see a positive trend in the ratios from Dec 31, 2020, to Jun 30, 2021, where the ratio steadily increased from 9.77 to 10.52, indicating improved efficiency in working capital management.

However, the ratio experienced a significant spike to 12.72 on Sep 30, 2021, suggesting a potential temporary surplus in working capital relative to sales during that period. This spike could be attributed to various factors such as changes in inventory levels, receivables management, or payment terms with suppliers.

Subsequently, the ratio declined but remained relatively high, indicating that the company continued to effectively utilize its working capital to support sales.

Overall, analyzing the working capital turnover ratio provides insights into the company's efficiency in managing its current assets and liabilities to drive sales growth. It is essential for Ethan Allen Interiors Inc to sustain a balance in working capital utilization to support its operating activities effectively.