Franklin Electric Co Inc (FELE)
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 | 2,041,219 | 2,056,177 | 2,068,471 | 2,054,878 | 2,024,939 | 1,973,102 | 1,885,052 | 1,771,958 | 1,654,390 | 1,542,467 | 1,435,189 | 1,306,706 | 1,241,381 | 1,242,820 | 1,241,335 | 1,287,613 | 1,310,047 | 1,306,547 | 1,295,924 | 1,283,749 |
| Total current assets | US$ in thousands | 853,795 | 899,498 | 966,390 | 968,045 | 858,090 | 887,719 | 913,183 | 833,585 | 724,647 | 728,130 | 691,266 | 635,250 | 619,254 | 602,539 | 549,341 | 543,055 | 567,444 | 617,567 | 649,126 | 605,702 |
| Total current liabilities | US$ in thousands | 287,039 | 327,920 | 432,677 | 486,861 | 405,769 | 461,808 | 539,527 | 491,588 | 396,014 | 401,473 | 387,005 | 200,354 | 203,704 | 187,866 | 173,896 | 191,387 | 185,764 | 257,245 | 301,356 | 284,084 |
| Working capital turnover | 3.60 | 3.60 | 3.88 | 4.27 | 4.48 | 4.63 | 5.04 | 5.18 | 5.03 | 4.72 | 4.72 | 3.00 | 2.99 | 3.00 | 3.31 | 3.66 | 3.43 | 3.63 | 3.73 | 3.99 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,041,219K ÷ ($853,795K – $287,039K)
= 3.60
The working capital turnover ratio is used to measure how efficiently a company is utilizing its working capital to generate revenues. A higher ratio indicates that the company is effectively utilizing its assets to drive sales.
Examining the data for Franklin Electric Co., Inc. over the last eight quarters, we observe a fluctuating trend in the working capital turnover ratio. In Q1 2022, the ratio was at its peak at 5.21, indicating that for every dollar of working capital invested, the company generated $5.21 in sales.
Subsequently, the ratio experienced a decline in Q2 and Q3 2022 but picked up in Q4 2022, reaching 4.52. The trend continued into 2023, with the ratio ranging between 3.64 to 4.32. While the ratios remained relatively consistent in Q3 and Q4 2023, there was a slight decrease in efficiency compared to the numbers seen in 2022.
Overall, Franklin Electric Co., Inc. has demonstrated a reasonably stable performance in terms of working capital turnover. However, management may want to explore strategies to enhance efficiency further to optimize the utilization of working capital and maximize revenue generation.
Peer comparison
Dec 31, 2023