Frontdoor Inc (FTDR)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,780,000 | 1,662,000 | 1,602,000 | 1,474,000 | 1,365,000 |
| Total current assets | US$ in thousands | 363,000 | 330,000 | 295,000 | 626,000 | 461,000 |
| Total current liabilities | US$ in thousands | 331,000 | 364,000 | 378,000 | 403,000 | 364,000 |
| Working capital turnover | 55.62 | — | — | 6.61 | 14.07 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,780,000K ÷ ($363,000K – $331,000K)
= 55.62
The working capital turnover ratio for Frontdoor Inc. has shown fluctuations over the past five years, ranging from 6.61 to 55.62.
In 2019, the company had a working capital turnover of 13.93, indicating that it generated $13.93 in revenue for every $1 of working capital. This suggests that Frontdoor Inc. effectively utilized its working capital to generate sales.
The ratio was not available for 2020 and 2021, but based on the significant increase to 55.62 in 2023, it appears that the company experienced a substantial improvement in efficiency in utilizing its working capital to generate revenue.
A higher working capital turnover ratio signifies that the company is managing its working capital more efficiently, potentially by reducing excess inventory, collecting receivables faster, or extending payable periods.
This progression in the working capital turnover ratio could indicate improved operational efficiency and effective management of working capital by Frontdoor Inc. over the years, leading to a more optimal utilization of resources to drive revenue generation.
Peer comparison
Dec 31, 2023