Hormel Foods Corporation (HRL)
Working capital turnover
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 11,920,800 | 12,036,600 | 12,389,600 | 11,339,200 | 9,585,600 |
| Total current assets | US$ in thousands | 3,246,480 | 3,297,250 | 3,637,120 | 2,947,820 | 3,579,060 |
| Total current liabilities | US$ in thousands | 1,399,300 | 2,311,780 | 1,473,270 | 1,415,650 | 1,503,960 |
| Working capital turnover | 6.45 | 12.21 | 5.73 | 7.40 | 4.62 |
October 27, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $11,920,800K ÷ ($3,246,480K – $1,399,300K)
= 6.45
Hormel Foods Corporation's working capital turnover has exhibited fluctuations over the past five years, as indicated by the figures provided. The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue.
In the most recent year, as of October 27, 2024, Hormel Foods Corporation's working capital turnover stood at 6.45. This suggests that the company generated $6.45 in sales revenue for every dollar of working capital invested during the year.
Comparing this to the previous years, we see a significant increase from the ratio of 5.73 in October 30, 2022, to 12.21 in October 29, 2023, which indicates a substantial improvement in the efficiency of working capital utilization during that period.
In general, a higher working capital turnover ratio indicates more efficient utilization of working capital and better liquidity management. However, it is important to consider the industry norms and company's specific circumstances when evaluating the ratio.
Overall, the trend of working capital turnover for Hormel Foods Corporation shows variability, potentially reflecting changes in the company's operations, sales, and working capital management strategies over the years. It would be beneficial for stakeholders to further investigate the underlying reasons for these fluctuations to assess the company's financial performance and efficiency.