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.
Peer comparison
Dec 31, 2023