Leggett & Platt Incorporated (LEG)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 749,100 | 4,725,300 | 5,146,700 | 5,072,600 | 4,280,200 |
| Total current assets | US$ in thousands | 1,690,500 | 1,881,400 | 1,958,000 | 2,065,300 | 1,612,100 |
| Total current liabilities | US$ in thousands | 846,400 | 1,262,600 | 968,100 | 1,335,700 | 1,006,000 |
| Working capital turnover | 0.89 | 7.64 | 5.20 | 6.95 | 7.06 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $749,100K ÷ ($1,690,500K – $846,400K)
= 0.89
The working capital turnover ratio of Leggett & Platt Incorporated has shown some fluctuations over the past years. In 2020, the ratio stood at 7.06, indicating that the company effectively utilized its working capital to generate sales. However, there was a slight decline in 2021 to 6.95, which suggests a slightly less efficient use of working capital in generating revenue.
The ratio took a larger dip in 2022, dropping to 5.20. This significant decrease may indicate difficulties in managing working capital efficiently or a decrease in sales relative to the working capital invested.
The company managed to improve its working capital turnover in 2023, reaching 7.64, showing a strong rebound in the efficiency of working capital utilization. However, the ratio plummeted to 0.89 in 2024, which is a cause for concern. This sharp decline could be a signal of issues such as overstocking, delayed collections, or inefficient management of working capital during that period.
Overall, while Leggett & Platt Incorporated has demonstrated varying levels of efficiency in converting working capital into sales in recent years, it is essential for the company to focus on maintaining a consistent and optimal working capital turnover ratio to support sustainable business operations and growth.
Peer comparison
Dec 31, 2024