Forward Air Corporation (FWRD)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,337,060	1,959,900	1,652,200	1,269,570	1,215,190
Total current assets	US$ in thousands	347,028	304,315	282,807	245,896	236,318
Total current liabilities	US$ in thousands	237,094	169,398	164,692	171,620	137,164
Working capital turnover		12.16	14.53	13.99	17.09	12.26

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,337,060K ÷ ($347,028K – $237,094K)
= 12.16

Working capital turnover is a financial ratio that measures how efficiently a company utilizes its working capital to generate sales revenue. The ratio is calculated by dividing total revenue by average working capital. A higher working capital turnover ratio indicates that the company is effectively managing its working capital to generate sales.

Analyzing the trend in Forward Air Corporation's working capital turnover over the past five years, we observe fluctuations in the ratio. In 2023, the working capital turnover decreased to 12.16 from 14.53 in 2022, indicating a decrease in efficiency in utilizing working capital to generate sales. However, it is important to note that the ratio is still above 10, suggesting that the company is able to generate sales efficiently using its working capital.

Comparing the current ratio to previous years, we see that 2020 had the highest working capital turnover of 17.09, indicating the most efficient use of working capital to generate revenue. On the other hand, the ratios for 2021 and 2019 were 13.99 and 12.26, respectively, showing slightly lower efficiency compared to 2020.

Overall, while there has been some fluctuation in Forward Air Corporation's working capital turnover ratio over the past five years, the company has generally exhibited efficient management of working capital to drive sales revenue. However, it may be beneficial for the company to further analyze the factors contributing to the fluctuations and make adjustments to improve efficiency in the future.