L3Harris Technologies Inc (LHX)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	21,325,000	19,419,000	17,062,000	17,814,000	18,194,000
Total current assets	US$ in thousands	8,218,000	8,055,000	6,754,000	6,359,000	6,667,000
Total current liabilities	US$ in thousands	7,633,000	8,004,000	5,776,000	4,551,000	4,240,000
Working capital turnover		36.45	380.76	17.45	9.85	7.50

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $21,325,000K ÷ ($8,218,000K – $7,633,000K)
= 36.45

In analyzing L3Harris Technologies Inc's working capital turnover, we observe a significant increase over the years. The working capital turnover ratio has shown a rising trend from 7.50 in 2020 to 36.45 in 2024. This indicates that the company has been able to generate more revenue from its working capital invested in the business.

The substantial increase in the working capital turnover ratio suggests that L3Harris Technologies Inc has been efficiently managing its working capital, converting it into sales at a faster rate each year. This efficiency can be attributed to effective inventory and receivables management, as well as overall operational effectiveness.

Such a high working capital turnover ratio, particularly in 2023 and 2024, may imply that the company has been able to streamline its operations and optimize its working capital utilization to drive revenue growth. However, it is also essential to ensure that the company maintains a balance between aggressively turning over working capital and meeting its operational needs to sustain this growth in the long term.

Overall, the increasing trend in L3Harris Technologies Inc's working capital turnover ratio signals operational efficiency and effective working capital management, which could potentially support the company's financial performance and growth prospects.