International Paper (IP)
Working capital turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 18,777,000 | 19,226,000 | 19,950,000 | 20,642,000 | 20,895,000 | 20,848,000 | 21,191,000 | 21,565,000 | 21,742,000 | 21,895,000 | 21,286,000 | 20,347,000 | 20,237,000 | 20,497,000 | 20,929,000 | 21,724,000 | 21,999,000 | 22,451,000 | 22,774,000 | 28,762,000 |
| Total current assets | US$ in thousands | 6,608,000 | 6,780,000 | 6,476,000 | 6,615,000 | 6,770,000 | 6,622,000 | 7,046,000 | 7,184,000 | 7,096,000 | 9,896,000 | 12,226,000 | 12,167,000 | 11,236,000 | 11,288,000 | 6,599,000 | 7,215,000 | 6,639,000 | 7,051,000 | 7,388,000 | 7,062,000 |
| Total current liabilities | US$ in thousands | 3,959,000 | 3,882,000 | 4,067,000 | 4,266,000 | 5,000,000 | 4,805,000 | 4,352,000 | 4,142,000 | 4,144,000 | 4,698,000 | 8,635,000 | 8,390,000 | 8,284,000 | 8,476,000 | 8,330,000 | 9,342,000 | 8,646,000 | 4,729,000 | 5,049,000 | 4,953,000 |
| Working capital turnover | 7.09 | 6.63 | 8.28 | 8.79 | 11.81 | 11.47 | 7.87 | 7.09 | 7.37 | 4.21 | 5.93 | 5.39 | 6.86 | 7.29 | — | — | — | 9.67 | 9.74 | 13.64 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $18,777,000K ÷ ($6,608,000K – $3,959,000K)
= 7.09
The working capital turnover ratio for International Paper Co. has fluctuated over the past eight quarters, ranging from a low of 6.32 in Q1 2022 to a high of 11.96 in Q4 2022. This ratio measures the efficiency of the company in generating revenue from its working capital.
A higher working capital turnover ratio indicates that the company is able to efficiently utilize its working capital to generate sales revenue, which is generally seen as a positive sign of operational efficiency. Conversely, a lower ratio may suggest that the company is not effectively managing its working capital.
The trend in International Paper Co.'s working capital turnover ratio shows some variability, with fluctuations observed from quarter to quarter. It peaked in Q4 2022 at 11.96 but has since declined, reaching a low of 6.32 in Q1 2022 before showing an upward trend in subsequent quarters.
Overall, a working capital turnover ratio above 1 indicates that the company is effectively using its working capital to support sales activities. International Paper Co.'s ratios above 6 in recent quarters suggest that the company is efficiently converting its working capital into sales revenue. However, management should continue to monitor and strive for consistency in this ratio to ensure ongoing operational efficiency.
Peer comparison
Dec 31, 2023