Eaton Corporation PLC (ETN)
Working capital turnover
| 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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 23,106,000 | 22,505,000 | 21,868,000 | 21,178,000 | 20,562,000 | 19,970,000 | 20,218,000 | 20,349,000 | 20,114,000 | 20,118,000 | 19,180,000 | 17,774,000 | 18,008,000 | 18,475,000 | 19,163,000 | 20,776,000 | 21,229,000 | 21,373,000 | 21,496,000 | 26,924,000 |
| Total current assets | US$ in thousands | 11,675,000 | 10,983,000 | 10,303,000 | 9,138,000 | 8,746,000 | 8,540,000 | 8,687,000 | 8,194,000 | 7,511,000 | 7,487,000 | 9,789,000 | 9,905,000 | 9,178,000 | 8,671,000 | 8,213,000 | 8,670,000 | 8,728,000 | 8,012,000 | 8,126,000 | 7,744,000 |
| Total current liabilities | US$ in thousands | 7,747,000 | 7,563,000 | 6,725,000 | 6,087,000 | 6,360,000 | 6,653,000 | 8,974,000 | 8,256,000 | 7,212,000 | 5,914,000 | 8,906,000 | 6,581,000 | 5,881,000 | 5,805,000 | 5,489,000 | 4,944,000 | 5,132,000 | 4,661,000 | 4,450,000 | 5,286,000 |
| Working capital turnover | 5.88 | 6.58 | 6.11 | 6.94 | 8.62 | 10.58 | — | — | 67.27 | 12.79 | 21.72 | 5.35 | 5.46 | 6.45 | 7.03 | 5.58 | 5.90 | 6.38 | 5.85 | 10.95 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $23,106,000K ÷ ($11,675,000K – $7,747,000K)
= 5.88
The working capital turnover ratio for Eaton Corporation plc has been fluctuating over the past eight quarters. The ratio represents how efficiently the company is able to generate sales revenue using its working capital.
In Q1 2022, the working capital turnover was 8.70, suggesting that the company was able to generate $8.70 in revenue for every dollar of working capital invested. However, in the subsequent quarters, this ratio has been declining steadily. By Q4 2023, the ratio had decreased to 5.91, indicating a lower efficiency in utilizing working capital to generate sales.
The variations in the working capital turnover ratio could imply changes in the company's management of its current assets and liabilities. A downward trend in this ratio may signal inefficiencies in managing working capital, potentially leading to cash flow problems or decreased profitability.
It would be essential for Eaton Corporation plc to further analyze the reasons behind the fluctuations in the working capital turnover ratio and take steps to improve its working capital management to enhance operational efficiency and financial performance.
Peer comparison
Dec 31, 2023
See also:
Eaton Corporation PLC Working Capital Turnover (Quarterly Data)