Graham Holdings Co (GHC)

Working capital turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue US$ in thousands 4,790,900 4,414,880 3,924,490 3,185,970 2,889,120
Total current assets US$ in thousands 2,098,620 1,849,300 1,708,090 1,847,170 1,774,190
Total current liabilities US$ in thousands 1,199,800 1,229,680 1,174,010 1,166,340 949,646
Working capital turnover 5.33 7.13 7.35 4.68 3.50

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,790,900K ÷ ($2,098,620K – $1,199,800K)
= 5.33

Working capital turnover is a financial ratio that indicates how efficiently a company is utilizing its working capital to generate revenue. Looking at the data provided for Graham Holdings Co, we can observe a steady improvement in the working capital turnover ratio over the years.

In December 31, 2020, the working capital turnover was 3.50. This means that for every dollar of working capital the company had, it generated $3.50 in revenue. Over the subsequent years, the ratio has increased significantly. By December 31, 2022, the ratio reached 7.35, indicating a notable improvement in the company's efficiency in converting its working capital into revenue.

Although there was a slight decrease in the ratio in December 31, 2023 to 7.13, the overall trend remains positive. As of December 31, 2024, the working capital turnover stands at 5.33, still reflecting an efficient utilization of working capital to generate revenue.

The increasing trend in the working capital turnover ratio for Graham Holdings Co suggests that the company has been effectively managing its working capital to support its operations and drive revenue growth over the years. This improvement indicates a positive sign of operational efficiency and effective financial management within the company.