FedEx Corporation (FDX)
Working capital turnover
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 86,948,000 | 89,461,000 | 92,823,000 | 82,773,000 | 68,545,000 |
| Total current assets | US$ in thousands | 18,207,000 | 18,610,000 | 20,365,000 | 20,580,000 | 16,383,000 |
| Total current liabilities | US$ in thousands | 13,355,000 | 13,586,000 | 14,274,000 | 13,660,000 | 10,344,000 |
| Working capital turnover | 17.92 | 17.81 | 15.24 | 11.96 | 11.35 |
May 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $86,948,000K ÷ ($18,207,000K – $13,355,000K)
= 17.92
FedEx Corporation's working capital turnover has shown a consistent upward trend over the past five years, indicative of the company's efficiency in managing its working capital. The working capital turnover ratio measures how effectively a company is utilizing its working capital to generate revenue.
In the latest fiscal year ending on May 31, 2024, FedEx's working capital turnover stood at 17.92, demonstrating an improvement compared to the previous year's ratio of 17.81. This suggests that FedEx is generating $17.92 in revenue for every dollar of working capital invested during the fiscal year.
The sustained increase in working capital turnover from 11.35 in May 2020 to 17.92 in May 2024 highlights FedEx's ability to optimize its operations, streamline its inventory management, and efficiently collect receivables. This efficiency may be attributed to effective management practices and strategic decision-making, which have enhanced the company's overall financial performance and operational effectiveness.
Overall, the rising trend in FedEx's working capital turnover signifies a positive indicator of the company's operational efficiency and financial health, reflecting its capacity to generate revenue relative to its working capital investments.