WW Grainger Inc (GWW)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 16,387,000 | 15,137,000 | 12,937,000 | 11,598,000 | 11,413,000 |
| Total current assets | US$ in thousands | 5,274,000 | 4,977,000 | 4,011,000 | 3,919,000 | 3,555,000 |
| Total current liabilities | US$ in thousands | 1,831,000 | 2,010,000 | 1,528,000 | 1,441,000 | 1,678,000 |
| Working capital turnover | 4.76 | 5.10 | 5.21 | 4.68 | 6.08 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $16,387,000K ÷ ($5,274,000K – $1,831,000K)
= 4.76
W.W. Grainger Inc.'s working capital turnover has shown a decline over the past three years, with the ratio decreasing from 5.24 in 2021 to 4.79 in 2023. This trend suggests that the company's efficiency in generating revenue from its working capital has slightly weakened. However, the ratio remains relatively healthy, indicating that W.W. Grainger is still effectively utilizing its working capital to support its operations and generate sales.
It is worth noting that the working capital turnover ratio can be influenced by a variety of factors, including changes in sales volume, inventory management practices, and accounts receivable policies. Therefore, further analysis of these components would be necessary to gain a more in-depth understanding of W.W. Grainger's working capital efficiency.
Overall, while the slight decline in the working capital turnover ratio may raise some concerns, the company's ability to generate revenue from its working capital remains solid, reflecting efficient management of its operational resources.