Flowers Foods Inc (FLO)

Working capital turnover

Dec 31, 2023 Oct 7, 2023 Jul 15, 2023 Apr 22, 2023 Dec 31, 2022 Oct 8, 2022 Apr 23, 2022 Dec 31, 2021 Oct 9, 2021 Jul 17, 2021 Apr 24, 2021 Dec 31, 2020 Sep 30, 2020 Jul 11, 2020 Apr 18, 2020 Dec 31, 2019 Oct 5, 2019 Jul 13, 2019 Apr 20, 2019 Dec 31, 2018
Revenue (ttm) US$ in thousands 5,090,830 5,044,470 5,003,380 5,211,260 4,660,260 4,605,390 4,464,530 4,330,770 4,370,320 4,332,170 4,340,720 4,387,990 4,282,709 4,259,620 4,209,519 4,123,979 4,086,887 4,043,775 4,009,299 3,951,849
Total current assets US$ in thousands 687,713 714,579 748,940 715,853 804,940 835,416 818,866 746,118 849,333 839,972 788,131 838,203 866,643 849,472 831,820 553,918 565,827 569,461 577,388 543,724
Total current liabilities US$ in thousands 659,152 669,859 555,457 542,119 564,425 594,531 538,024 519,917 536,591 509,767 461,206 504,105 516,283 538,076 504,914 528,143 521,942 494,945 495,145 400,339
Working capital turnover 178.24 112.80 25.86 30.00 19.38 19.12 15.90 19.15 13.97 13.12 13.28 13.13 12.22 13.68 12.88 160.00 93.13 54.27 48.75 27.56

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $5,090,830K ÷ ($687,713K – $659,152K)
= 178.24

The working capital turnover ratio of Flowers Foods Inc has displayed fluctuations over the past several periods, ranging from as low as 12.22 to as high as 178.24. A high working capital turnover ratio indicates that the company is efficiently using its working capital to generate sales revenue. In contrast, a low ratio suggests that the company may not be effectively utilizing its working capital.

The significant increase in the working capital turnover ratio from 19.38 in December 2022 to 178.24 in December 2023 indicates a substantial improvement in the efficiency of Flowers Foods Inc in generating sales from its working capital. This could be a positive sign reflecting effective management of current assets and liabilities to support revenue generation.

On the other hand, the drop in the ratio to 25.86 in July 2023 followed by a decline to 30.00 in April 2023 may raise concerns about working capital management during those periods. The company may have been less efficient in using its working capital to drive sales during these specific quarters.

Overall, understanding the trends and fluctuations in the working capital turnover ratio of Flowers Foods Inc can provide insights into the company's operational efficiency and financial performance. Further analysis and comparison with industry benchmarks would be beneficial in evaluating the effectiveness of the company's working capital management.