Freshpet Inc (FRPT)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 975,177 | 766,895 | 595,344 | 425,489 | 318,790 |
| Total current assets | US$ in thousands | 436,998 | 427,319 | 261,965 | 150,325 | 109,096 |
| Total current liabilities | US$ in thousands | 98,869 | 89,222 | 89,614 | 58,946 | 33,121 |
| Working capital turnover | 2.88 | 2.27 | 3.45 | 4.66 | 4.20 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $975,177K ÷ ($436,998K – $98,869K)
= 2.88
The working capital turnover ratio for Freshpet Inc. exhibits notable fluctuations over the period from December 31, 2020, to December 31, 2024.
At the end of 2020, the ratio was 4.20, indicating a relatively efficient utilization of working capital in generating sales. This ratio increased by 2021 to 4.66, suggesting an improvement in the company's ability to leverage its working capital for revenue generation, possibly due to operational efficiencies or increased sales volume relative to working capital.
However, in 2022, the ratio declined to 3.45, indicating a reduction in the efficiency of working capital utilization. This decline suggests that the company's sales growth did not keep pace with the increase in working capital or that working capital consumption increased without proportional sales growth.
The downward trend continued significantly into 2023, with the ratio decreasing to 2.27, reflecting further diminishing efficiency in managing working capital relative to sales. This decline could be indicative of increased inventory levels, receivables, or other working capital components not translating into equivalent sales increases.
By 2024, the ratio increased slightly to 2.88, implying a modest improvement in working capital efficiency, although it remained well below the peak levels observed in 2021. This slight rebound suggests some operational adjustments or improved sales performance relative to working capital investment, but overall, the ratio remains subdued compared to previous years.
In summary, the working capital turnover ratio for Freshpet Inc. demonstrates a declining trend from 2021 through 2023, with a slight recovery in 2024. This pattern may reflect challenges in maintaining operational efficiency, changes in working capital management, or shifts in sales dynamics over the analyzed period.
Peer comparison
Dec 31, 2024