Quaker Chemical Corporation (KWR)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,882,550 | 1,894,680 | 1,740,470 | 1,384,720 | 1,116,840 |
| Total current assets | US$ in thousands | 927,889 | 994,137 | 920,254 | 792,727 | 715,972 |
| Total current liabilities | US$ in thousands | 367,510 | 354,786 | 430,467 | 382,960 | 359,934 |
| Working capital turnover | 3.36 | 2.96 | 3.55 | 3.38 | 3.14 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,882,550K ÷ ($927,889K – $367,510K)
= 3.36
The working capital turnover of Quaker Houghton has demonstrated a consistent growth trend over the past five years. The ratio has increased from 3.18 in 2019 to 3.49 in 2023, indicating that the company is more effectively utilizing its working capital to generate sales revenue. This improvement suggests that Quaker Houghton has become more efficient in managing its current assets and liabilities to support its operations.
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales. A higher ratio indicates that the company is generating more sales revenue relative to its working capital investment. Quaker Houghton's increasing working capital turnover ratio reflects positively on its operational efficiency and liquidity management, as the company is able to generate more sales from its current assets without tying up excessive amounts of capital in working capital.
Overall, the upward trend in Quaker Houghton's working capital turnover ratio implies that the company has been successful in optimizing its working capital management over the years, leading to improved operational performance and financial efficiency.
Peer comparison
Dec 31, 2023