Kontoor Brands Inc (KTB)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	2,579,340	2,604,520	2,434,200	2,097,840	2,548,840
Total current assets	US$ in thousands	1,043,880	982,269	910,658	901,680	877,603
Total current liabilities	US$ in thousands	392,637	440,429	455,812	413,635	378,550
Working capital turnover		3.96	4.81	5.35	4.30	5.11

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,579,340K ÷ ($1,043,880K – $392,637K)
= 3.96

The working capital turnover ratio for Kontoor Brands Inc has exhibited variation over the past five years. The ratio measures how efficiently the company is utilizing its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is effectively managing its working capital resources.

From 2019 to 2021, Kontoor Brands Inc experienced an increasing trend in its working capital turnover ratio, indicating improved efficiency in utilizing its working capital to generate sales. This trend peaked in 2021 at 5.35, suggesting that the company was able to generate $5.35 in sales revenue for every dollar of working capital invested.

However, in 2022 and 2023, the working capital turnover ratio declined to 4.81 and 3.96, respectively. This might suggest a potential decrease in efficiency in utilizing working capital to generate sales revenue during these years.

Overall, Kontoor Brands Inc should continue monitoring its working capital turnover ratio to ensure efficient utilization of resources and strive for a balance between managing working capital effectively and generating sales revenue efficiently.