Installed Building Products Inc (IBP)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,742,600 | 2,629,690 | 1,935,880 | 1,623,720 | 1,479,940 |
| Total current assets | US$ in thousands | 1,070,000 | 884,400 | 859,316 | 623,943 | 581,949 |
| Total current liabilities | US$ in thousands | 346,400 | 328,100 | 307,569 | 236,475 | 214,149 |
| Working capital turnover | 3.79 | 4.73 | 3.51 | 4.19 | 4.02 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,742,600K ÷ ($1,070,000K – $346,400K)
= 3.79
Installed Building Products Inc's working capital turnover has fluctuated over the past five years, ranging from a low of 3.57 in 2021 to a high of 4.80 in 2022. The working capital turnover ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue. A higher ratio is generally favorable as it suggests that the company is effectively managing its working capital to support sales.
In 2023, the working capital turnover ratio decreased to 3.84 from the previous year's higher ratio of 4.80. This may indicate a slight decrease in the efficiency of managing working capital to support sales generation. However, it is still higher than the 2021 and 2019 ratios, suggesting that there has been an overall improvement in working capital efficiency over the past five years.
It is important for Installed Building Products Inc to continue monitoring its working capital turnover ratio to ensure optimal utilization of working capital resources and efficient operations. Further analysis and comparison with industry benchmarks may provide additional insights into the company's financial performance and liquidity management.
Peer comparison
Dec 31, 2023