Inter Parfums Inc (IPAR)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,317,700	1,086,700	879,500	539,000	713,500
Total current assets	US$ in thousands	839,026	787,724	709,715	600,720	573,296
Total current liabilities	US$ in thousands	324,745	344,567	244,910	156,205	184,465
Working capital turnover		2.56	2.45	1.89	1.21	1.83

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,317,700K ÷ ($839,026K – $324,745K)
= 2.56

Interpreting the trend in Inter Parfums, Inc.'s working capital turnover reveals fluctuations over the past five years. The working capital turnover ratio measures a company's efficiency in utilizing its working capital to generate sales revenue. A higher turnover ratio generally indicates effective management of working capital.

In 2023, the working capital turnover ratio improved to 2.56 compared to the previous year's 2.45. This suggests that the company efficiently converted its working capital into sales during the year, indicating effective management of liquidity and operational resources.

Looking back to 2021 and 2020, the working capital turnover ratios were 1.89 and 1.21, respectively, reflecting a decline in efficiency in converting working capital to sales during these periods. However, there was a notable improvement in 2021 compared to the previous year, which could indicate better utilization of working capital to drive sales.

In 2019, the working capital turnover ratio stood at 1.84, indicating a moderate level of efficiency in utilizing working capital to generate sales.

Overall, the trend in Inter Parfums, Inc.'s working capital turnover ratio suggests varying levels of efficiency in managing working capital over the past five years, with fluctuations possibly influenced by changes in sales volumes, inventory management, and accounts receivable and payable practices.