Mercer International Inc (MERC)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,902,410 | 2,225,980 | 1,713,880 | 1,327,140 | 1,535,420 |
| Total current assets | US$ in thousands | 1,092,900 | 1,178,180 | 1,064,300 | 874,852 | 844,697 |
| Total current liabilities | US$ in thousands | 286,437 | 378,061 | 283,124 | 211,796 | 256,312 |
| Working capital turnover | 2.36 | 2.78 | 2.19 | 2.00 | 2.61 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,902,410K ÷ ($1,092,900K – $286,437K)
= 2.36
Mercer International Inc.'s working capital turnover has fluctuated over the past five years. The ratio indicates the ability of the company to efficiently utilize its working capital to generate sales revenue. A higher working capital turnover is generally preferred as it suggests that the company is effectively managing its working capital to support its operations.
In this case, from 2019 to 2023, the working capital turnover ranged from a low of 2.15 to a high of 2.85. The decrease in 2020 was followed by an increase in 2021 and 2022, and a slight decrease again in 2023. Overall, the company has maintained a relatively healthy working capital turnover ratio, with values consistently above 2. This indicates that Mercer International Inc. has been able to efficiently convert its working capital into sales revenue, although there have been some fluctuations in efficiency over the years.
Further analysis, in conjunction with other financial metrics and industry benchmarks, would be necessary to provide a more comprehensive evaluation of Mercer International Inc.'s overall financial performance and working capital management effectiveness.