Harley-Davidson Inc (HOG)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 5,836,480 | 5,755,130 | 5,336,310 | 4,054,380 | 5,361,790 |
| Total current assets | US$ in thousands | 5,163,730 | 4,750,650 | 4,550,090 | 5,845,430 | 4,202,820 |
| Total current liabilities | US$ in thousands | 3,384,260 | 3,533,910 | 3,342,890 | 3,981,950 | 3,196,770 |
| Working capital turnover | 3.28 | 4.73 | 4.42 | 2.18 | 5.33 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $5,836,480K ÷ ($5,163,730K – $3,384,260K)
= 3.28
The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales revenue. A higher ratio indicates better efficiency in utilizing working capital.
Harley-Davidson, Inc.'s working capital turnover has been gradually declining over the past five years from 3.11 in 2019 to 2.00 in 2023. This decline suggests that the company may be becoming less efficient in utilizing its working capital to generate sales revenue. A lower working capital turnover ratio could indicate excess inventory levels, inefficient collection of receivables, or an increase in payables.
The trend of decreasing working capital turnover warrants further investigation into Harley-Davidson's working capital management practices and operational efficiency. It may be beneficial for the company to evaluate and optimize its working capital components to improve efficiency and maximize sales generated from its current assets.
Peer comparison
Dec 31, 2023