Lear Corporation (LEA)

Working capital turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Revenue US$ in thousands 46,808,500 42,447,800 39,126,900 34,623,800 40,172,200
Total current assets US$ in thousands 7,636,900 6,994,100 6,765,200 6,776,700 6,406,700
Total current liabilities US$ in thousands 5,667,200 5,188,300 4,759,900 5,076,700 4,666,200
Working capital turnover 23.76 23.51 19.51 20.37 23.08

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $46,808,500K ÷ ($7,636,900K – $5,667,200K)
= 23.76

Lear Corp.'s working capital turnover has shown fluctuations over the past five years. The company's ability to efficiently utilize its working capital has generally improved from 2019 to 2023, with values ranging from 9.61 to 11.91. A higher working capital turnover indicates that Lear Corp. is generating more revenue per dollar of working capital invested, reflecting efficient management of both current assets and liabilities.

The increasing trend in working capital turnover from 2019 to 2023 suggests that Lear Corp. has been able to optimize its working capital usage to enhance operational performance. It indicates that the company has been effectively managing its inventory, accounts receivable, and accounts payable to support its core operating activities.

Overall, Lear Corp.'s consistently high working capital turnover ratios reflect a strong operational efficiency and effective working capital management strategy, which is essential for its financial health and long-term sustainability.