Flowserve Corporation (FLS)
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 | 4,268,876 | 4,144,376 | 3,927,236 | 3,733,520 | 3,569,619 | 3,458,369 | 3,447,565 | 3,461,678 | 3,466,525 | 3,532,325 | 3,590,953 | 3,618,040 | 3,668,956 | 3,751,856 | 3,826,408 | 3,891,483 | 3,924,802 | 3,843,502 | 3,791,118 | 3,772,349 |
| Total current assets | US$ in thousands | 2,703,780 | 2,638,520 | 2,579,380 | 2,542,240 | 2,450,970 | 2,223,780 | 2,280,930 | 2,376,860 | 2,388,680 | 3,223,220 | 2,440,690 | 2,448,960 | 2,904,330 | 2,806,140 | 2,430,600 | 2,425,510 | 2,506,750 | 2,395,660 | 2,409,320 | 2,436,620 |
| Total current liabilities | US$ in thousands | 1,438,580 | 1,306,820 | 1,292,090 | 1,321,720 | 1,243,150 | 1,091,690 | 1,091,720 | 1,147,610 | 1,131,800 | 1,908,880 | 1,069,720 | 1,083,730 | 1,141,630 | 1,093,580 | 1,090,360 | 1,106,030 | 1,117,440 | 1,048,200 | 1,058,870 | 1,121,430 |
| Working capital turnover | 3.37 | 3.11 | 3.05 | 3.06 | 2.96 | 3.05 | 2.90 | 2.82 | 2.76 | 2.69 | 2.62 | 2.65 | 2.08 | 2.19 | 2.86 | 2.95 | 2.83 | 2.85 | 2.81 | 2.87 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,268,876K ÷ ($2,703,780K – $1,438,580K)
= 3.37
Flowserve Corp.'s working capital turnover indicates the efficiency with which the company is managing its working capital to generate sales. The trend in the working capital turnover ratio from Q1 2022 to Q4 2023 shows consistency, hovering between 2.85 to 3.41 times. This implies that, on average, for every dollar invested in working capital, Flowserve Corp. is generating sales turnover between 2.85 to 3.41 dollars.
A higher working capital turnover ratio demonstrates that Flowserve Corp. is able to efficiently utilize its current assets (such as inventory and receivables) to support sales growth. The fact that the ratio has been relatively stable around the 3.0 mark is a positive sign, indicating a consistent ability to efficiently convert working capital into revenue over the examined period.
However, it is essential to understand the industry benchmarks and historical performance of the company to gain a deeper insight into the effectiveness of Flowserve Corp.'s working capital management. Overall, a steady working capital turnover ratio is indicative of effective working capital management, which can contribute to sustainable growth and profitability.
Peer comparison
Dec 31, 2023