Chart Industries Inc (GTLS)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,031,500 | 1,594,000 | 1,300,300 | 1,389,800 | 1,274,000 |
| Total current assets | US$ in thousands | 2,214,400 | 3,690,900 | 853,500 | 703,000 | 673,600 |
| Total current liabilities | US$ in thousands | 1,866,200 | 1,081,600 | 693,900 | 634,800 | 378,300 |
| Working capital turnover | 8.71 | 0.61 | 8.15 | 20.38 | 4.31 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,031,500K ÷ ($2,214,400K – $1,866,200K)
= 8.71
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher working capital turnover ratio indicates better efficiency in managing working capital.
Looking at the trend of Chart Industries Inc's working capital turnover ratio over the past five years, we observe significant fluctuations. In 2020, the company had a high working capital turnover ratio of 17.26, indicating that for every dollar of working capital invested, the company generated $17.26 in sales. This exceptionally high ratio suggests the company was managing its working capital exceptionally effectively to generate revenue during that year.
However, in subsequent years, the working capital turnover ratio fluctuated, with a notable decrease to 0.62 in 2022, highlighting potential inefficiencies in working capital management during that period. The ratio then rebounded to 9.63 in 2023, signifying an improvement in utilizing working capital to drive sales.
Overall, the fluctuations in Chart Industries Inc's working capital turnover ratio indicate varying levels of effectiveness in managing working capital to support sales activities. It is essential for the company to consistently monitor and optimize its working capital efficiency to ensure sustainable growth and profitability in the long term.