Gates Industrial Corporation plc (GTES)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,408,200 | 3,570,200 | 3,554,200 | 3,474,400 | 2,793,000 |
| Total current assets | US$ in thousands | 2,306,000 | 2,401,300 | 2,277,400 | 2,278,700 | 1,906,600 |
| Total current liabilities | US$ in thousands | 721,500 | 779,300 | 752,300 | 855,900 | 726,300 |
| Working capital turnover | 2.15 | 2.20 | 2.33 | 2.44 | 2.37 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,408,200K ÷ ($2,306,000K – $721,500K)
= 2.15
The working capital turnover for Gates Industrial Corporation plc has shown a consistent trend over the past five years. Starting at 2.37 in December 31, 2020, it increased slightly to 2.44 by December 31, 2021, indicating an improvement in the company's efficiency in managing its working capital. However, in the following years, the ratio declined to 2.33 in 2022, 2.20 in 2023, and further to 2.15 by December 31, 2024.
The decreasing trend in working capital turnover may suggest that the company is taking longer to convert its working capital into revenue, indicating potential inefficiencies in the management of its current assets and liabilities. This could lead to higher carrying costs and reduced overall profitability if not addressed.
It is important for Gates Industrial Corporation plc to closely monitor and analyze the components of its working capital to identify the root causes of the declining turnover ratio. By implementing strategies to optimize inventory, receivables, and payables management, the company may be able to improve its working capital turnover and enhance its overall financial performance in the future.
Peer comparison
Dec 31, 2024