Guess? Inc. (GES)

Working capital turnover

Feb 3, 2024 Oct 28, 2023 Jul 29, 2023 Apr 29, 2023 Jan 28, 2023 Oct 29, 2022 Jul 30, 2022 Apr 30, 2022 Jan 29, 2022 Oct 30, 2021 Jul 31, 2021 May 1, 2021 Jan 30, 2021 Oct 31, 2020 Aug 1, 2020 May 2, 2020 Feb 1, 2020 Nov 2, 2019 Aug 3, 2019 May 4, 2019
Revenue (ttm) US$ in thousands 2,740,394 2,650,836 2,635,539 2,616,264 2,644,409 2,661,222 2,674,342 2,663,471 2,591,631 2,440,151 2,366,365 2,136,280 1,876,529 2,070,328 2,116,988 2,401,669 2,678,109 2,672,982 2,662,445 2,625,096
Total current assets US$ in thousands 1,225,470 1,228,490 1,260,070 1,212,680 1,211,700 1,150,530 1,099,000 1,023,380 1,284,090 1,271,250 1,263,890 1,174,180 1,232,520 1,132,920 1,073,940 1,110,400 1,064,240 997,592 967,507 917,985
Total current liabilities US$ in thousands 791,557 836,394 857,305 829,033 763,052 732,727 760,319 758,491 817,874 804,638 715,152 676,675 762,539 735,373 730,480 722,224 638,413 656,767 673,352 645,800
Working capital turnover 6.32 6.76 6.54 6.82 5.89 6.37 7.90 10.06 5.56 5.23 4.31 4.29 3.99 5.21 6.16 6.19 6.29 7.84 9.05 9.64

February 3, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,740,394K ÷ ($1,225,470K – $791,557K)
= 6.32

The working capital turnover ratio for Guess? Inc. has fluctuated over the past few periods, ranging from 3.99 to 10.06. A higher working capital turnover ratio indicates that the company is efficiently utilizing its working capital to generate sales.

In general, a higher working capital turnover ratio is considered favorable as it suggests that the company is managing its working capital effectively, resulting in faster turnover of inventory and accounts receivable. However, a very high ratio may indicate that the company is operating too lean and may face challenges in meeting short-term obligations.

Guess? Inc. experienced a peak in working capital turnover ratio in April 2022, with a ratio of 10.06, indicating a high efficiency in utilizing its working capital. However, there have been fluctuations in subsequent periods, with ratios ranging between 3.99 and 7.90. This indicates some variability in the company's working capital management efficiency.

It is important for Guess? Inc. to closely monitor its working capital turnover ratio to ensure optimal management of working capital resources and effective operations. Further analysis and benchmarking against industry standards can provide additional insights into the company's performance in this area.