GATX Corporation (GATX)

Working capital turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue US$ in thousands 1,585,500 1,410,900 1,273,000 1,257,400 1,209,200
Total current assets US$ in thousands 672,500 612,600 583,800 466,100 431,200
Total current liabilities US$ in thousands 10,400 11,000 17,300 18,100 23,600
Working capital turnover 2.39 2.35 2.25 2.81 2.97

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,585,500K ÷ ($672,500K – $10,400K)
= 2.39

The working capital turnover for GATX Corporation has shown a downward trend over the past five years. At December 31, 2020, the working capital turnover ratio was 2.97, indicating that the company generated revenue 2.97 times for every dollar of working capital invested. However, by December 31, 2021, the ratio declined to 2.81, and further decreased to 2.25 by December 31, 2022. This suggests that the company's efficiency in generating revenue from its working capital diminished during this period.

There was a slight improvement in the working capital turnover ratio by December 31, 2023, where it increased to 2.35, indicating a modest recovery in efficiency. By December 31, 2024, the ratio further improved to 2.39, although it still remains below the initial level in 2020.

Overall, the declining trend in working capital turnover raises concerns about the company's ability to efficiently utilize its working capital to generate revenue. It is important for GATX Corporation to closely monitor and improve its working capital management practices to enhance its operational efficiency and financial performance.