Helmerich and Payne Inc (HP)
Working capital turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,872,420 | 2,058,940 | 1,218,570 | 1,773,930 | 2,798,490 |
| Total current assets | US$ in thousands | 1,006,620 | 1,002,940 | 1,586,570 | 963,327 | 1,115,090 |
| Total current liabilities | US$ in thousands | 418,931 | 394,810 | 866,306 | 219,136 | 410,238 |
| Working capital turnover | 4.89 | 3.39 | 1.69 | 2.38 | 3.97 |
September 30, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,872,420K ÷ ($1,006,620K – $418,931K)
= 4.89
The working capital turnover ratio measures the efficiency of a company in utilizing its working capital to generate sales revenue. A higher ratio generally indicates better efficiency in utilizing working capital.
In the case of Helmerich & Payne, Inc., the working capital turnover has shown significant fluctuations over the past five years. The ratio was 4.89 in 2023, representing a substantial increase from the prior year. This indicates that the company was able to generate almost 5 times the sales revenue compared to its working capital in 2023, suggesting an efficient use of working capital in generating revenues.
The significant improvement in the working capital turnover from 2022 to 2023 signals enhanced efficiency in managing working capital and converting it into sales. This could be attributed to improved inventory and receivables management, as well as effective cash flow management.
Compared to 2021, where the ratio was 1.69, there has been a notable improvement in 2023, indicating a more effective utilization of working capital in generating sales revenue. However, it's important to note the fluctuations in the previous years, indicating potential fluctuations in the company's operational efficiency in converting working capital into sales.
Overall, the upward trend in the working capital turnover ratio for Helmerich & Payne, Inc. indicates an improvement in the utilization of working capital to generate sales revenue, suggesting a positive trend in the company's operational efficiency.
Peer comparison
Sep 30, 2023