Iridium Communications Inc (IRDM)
Working capital turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 830,682 | 808,198 | 784,915 | 784,230 | 790,723 | 765,535 | 769,021 | 754,775 | 721,034 | 694,988 | 672,226 | 644,376 | 614,500 | 562,328 | 564,734 | 567,318 | 583,439 | 575,806 | 569,119 | 572,046 |
| Total current assets | US$ in thousands | 292,730 | 354,869 | 264,416 | 376,792 | 271,084 | 252,931 | 268,682 | 278,725 | 306,204 | 358,226 | 342,823 | 351,423 | 424,410 | 392,570 | 321,782 | 322,313 | 347,821 | 286,539 | 229,309 | 180,262 |
| Total current liabilities | US$ in thousands | 169,214 | 135,314 | 117,506 | 113,001 | 131,554 | 119,003 | 124,241 | 116,321 | 141,577 | 126,836 | 105,990 | 95,686 | 108,836 | 93,464 | 86,914 | 88,317 | 113,072 | 100,671 | 101,942 | 89,327 |
| Working capital turnover | 6.73 | 3.68 | 5.34 | 2.97 | 5.67 | 5.72 | 5.32 | 4.65 | 4.38 | 3.00 | 2.84 | 2.52 | 1.95 | 1.88 | 2.40 | 2.42 | 2.49 | 3.10 | 4.47 | 6.29 |
December 31, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $830,682K ÷ ($292,730K – $169,214K)
= 6.73
Working capital turnover is an important financial ratio that measures how efficiently a company is utilizing its working capital to generate revenue. A higher working capital turnover ratio indicates a more efficient use of working capital.
Analyzing the working capital turnover of Iridium Communications Inc from March 31, 2020, to December 31, 2024, we observe fluctuations in the ratio. The ratio started at 6.29 on March 31, 2020, which means that the company was able to generate revenue 6.29 times using its working capital during that period.
Subsequently, the ratio decreased to 2.49 by December 31, 2020, and continued to decline until reaching a low of 1.88 on September 30, 2021, indicating a decreasing efficiency in utilizing working capital to generate revenue.
There was a gradual improvement in the ratio from March 31, 2022, to June 30, 2023, where it increased from 2.52 to 5.32, showing a positive trend in the efficient utilization of working capital during that period.
However, the ratio declined slightly to 5.67 by December 31, 2023, and then decreased significantly to 2.97 on March 31, 2024. The ratio improved again and reached a peak of 6.73 by December 31, 2024, indicating a significant improvement in the efficiency of working capital utilization in generating revenue.
In conclusion, the working capital turnover ratio of Iridium Communications Inc has shown fluctuations over the period analyzed, with some periods of inefficiency followed by improvements. It is essential for the company to monitor and manage its working capital effectively to ensure optimal utilization in generating revenue.
Peer comparison
Dec 31, 2024