Goodyear Tire & Rubber Co (GT)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 19,457,000 | 20,353,000 | 17,073,000 | 11,987,000 | 14,442,000 |
| Total current assets | US$ in thousands | 7,650,000 | 8,665,000 | 7,331,000 | 5,620,000 | 5,934,000 |
| Total current liabilities | US$ in thousands | 7,147,000 | 7,140,000 | 6,612,000 | 5,106,000 | 5,287,000 |
| Working capital turnover | 38.68 | 13.35 | 23.75 | 23.32 | 22.32 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $19,457,000K ÷ ($7,650,000K – $7,147,000K)
= 38.68
The working capital turnover ratio for Goodyear Tire & Rubber Co. has shown fluctuations over the five-year period, ranging from 13.64 to 39.89. In 2023, the ratio significantly increased to 39.89, indicating that the company generated $39.89 in revenue for every dollar of working capital invested. This substantial increase compared to the previous year suggests an improvement in the efficiency of managing working capital during the financial year.
The 2023 ratio of 39.89 is notably higher than the ratios in the preceding years, including the relatively low ratio of 13.64 in 2022. This large variation indicates a significant change in how effectively the company is utilizing its working capital to generate revenue. The 2023 ratio surpasses the ratios in 2021, 2020, and 2019, demonstrating a notable enhancement in working capital efficiency.
Overall, the upward trend in the working capital turnover ratio for Goodyear Tire & Rubber Co. indicates an improvement in the company's ability to generate sales revenue relative to its levels of working capital over the years. This positive trend suggests that the company has been able to optimize its working capital management and operational efficiency, potentially leading to better financial performance and profitability.