Goodyear Tire & Rubber Co (GT)
Working capital turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 19,457,000 | 19,771,000 | 19,950,000 | 20,353,000 | 20,353,000 | 20,029,000 | 19,675,000 | 18,454,000 | 17,073,000 | 15,698,000 | 14,244,000 | 12,406,000 | 11,955,000 | 12,037,000 | 12,373,000 | 13,888,000 | 14,438,000 | 14,593,000 | 14,727,000 | 14,929,000 |
| Total current assets | US$ in thousands | 7,650,000 | 8,677,000 | 8,858,000 | 9,213,000 | 8,665,000 | 9,951,000 | 9,223,000 | 8,563,000 | 7,331,000 | 8,121,000 | 7,519,000 | 5,948,000 | 5,620,000 | 5,695,000 | 5,413,000 | 6,173,000 | 5,934,000 | 6,861,000 | 6,781,000 | 6,492,000 |
| Total current liabilities | US$ in thousands | 7,147,000 | 6,694,000 | 6,940,000 | 6,984,000 | 7,140,000 | 7,459,000 | 7,121,000 | 6,945,000 | 6,612,000 | 6,893,000 | 6,603,000 | 5,333,000 | 5,106,000 | 4,893,000 | 4,626,000 | 5,266,000 | 5,287,000 | 5,173,000 | 5,081,000 | 5,087,000 |
| Working capital turnover | 38.68 | 9.97 | 10.40 | 9.13 | 13.35 | 8.04 | 9.36 | 11.41 | 23.75 | 12.78 | 15.55 | 20.17 | 23.26 | 15.01 | 15.72 | 15.31 | 22.32 | 8.65 | 8.66 | 10.63 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (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 significant fluctuations over the past eight quarters. In Q4 2023, the ratio spiked to 39.89, indicating a substantial increase in the company's efficiency in generating sales from its working capital. This suggests that Goodyear was able to efficiently utilize its working capital to support its operational activities and generate revenue during this period.
However, in Q3 and Q2 2023, the working capital turnover ratio dropped to 10.25 and 10.68, respectively, signaling a decrease in the company's ability to generate sales from its working capital compared to Q4 2023. This could indicate inefficiencies in managing its working capital or a decrease in sales relative to the capital invested.
Moreover, Q1 2023 saw a further decrease in the working capital turnover ratio to 9.35, which may raise concerns about the company's efficiency in utilizing its working capital to generate revenue.
Comparing these figures to the previous year, it is evident that the working capital turnover ratio has generally been higher. For instance, Q4 2022 recorded a ratio of 13.64, which was higher than all the quarters in 2023. This suggests a potential decline in efficiency in utilizing working capital for generating sales in 2023 compared to 2022.
Overall, a closer examination of the factors contributing to the fluctuations in the working capital turnover ratio, such as changes in sales, inventory management, and accounts payable/receivable, would be necessary to fully understand the financial efficiency of Goodyear Tire & Rubber Co.