Genuine Parts Co (GPC)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 23,026,100 | 22,227,700 | 18,747,300 | 16,432,400 | 19,255,100 |
| Total current assets | US$ in thousands | 9,605,850 | 8,816,740 | 7,756,420 | 7,113,760 | 7,938,620 |
| Total current liabilities | US$ in thousands | 7,827,110 | 7,686,110 | 6,581,580 | 5,894,080 | 6,394,120 |
| Working capital turnover | 12.95 | 19.66 | 15.96 | 13.47 | 12.47 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $23,026,100K ÷ ($9,605,850K – $7,827,110K)
= 12.95
The working capital turnover for Genuine Parts Co. has exhibited a fluctuating trend over the past five years, as indicated by the values of 12.98 in 2023, 19.54 in 2022, 16.06 in 2021, 13.56 in 2020, and 12.56 in 2019. The working capital turnover ratio measures how efficiently the company utilizes its working capital to generate sales revenue.
A higher working capital turnover ratio suggests that the company is efficient in managing its working capital and converting it into sales. In contrast, a lower ratio may indicate inefficiencies in working capital management. The significant fluctuations in Genuine Parts Co.'s working capital turnover over the years may reflect changes in the company's operations, sales volume, or working capital management strategies.
It is essential for the company to closely monitor its working capital turnover ratio to ensure optimal utilization of its resources and maintain liquidity levels necessary for day-to-day operations. By analyzing this ratio over time and in comparison to industry benchmarks, Genuine Parts Co. can gain insights into its operational efficiency and financial health.