MGP Ingredients Inc (MGPI)
Working capital turnover
Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Revenue (ttm) | US$ in thousands | 703,625 | 737,717 | 787,880 | 806,076 | 836,523 | 812,630 | 802,152 | 788,133 | 782,358 | 758,210 | 733,675 | 713,632 | 626,720 | 560,788 | 487,141 | 404,762 | 395,521 | 387,069 | 374,790 | 372,731 |
Total current assets | US$ in thousands | 546,136 | 532,008 | 546,400 | 506,919 | 514,297 | 503,916 | 520,849 | 475,439 | 454,162 | 440,644 | 422,524 | 395,265 | 367,098 | 351,896 | 353,641 | 229,548 | 222,283 | 221,084 | 217,038 | 242,263 |
Total current liabilities | US$ in thousands | 92,450 | 82,338 | 84,791 | 80,258 | 114,106 | 90,108 | 118,651 | 102,315 | 105,375 | 100,791 | 93,256 | 84,463 | 88,800 | 86,466 | 83,438 | 55,003 | 53,329 | 44,405 | 39,195 | 41,312 |
Working capital turnover | 1.55 | 1.64 | 1.71 | 1.89 | 2.09 | 1.96 | 1.99 | 2.11 | 2.24 | 2.23 | 2.23 | 2.30 | 2.25 | 2.11 | 1.80 | 2.32 | 2.34 | 2.19 | 2.11 | 1.85 |
December 31, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $703,625K ÷ ($546,136K – $92,450K)
= 1.55
The working capital turnover ratio of MGP Ingredients Inc fluctuated over the period from March 31, 2020, to December 31, 2024. The ratio measures how efficiently a company is using its working capital to generate sales revenue.
Initially, the working capital turnover ratio increased steadily from 1.85 on March 31, 2020, to a peak of 2.34 on December 31, 2020. This indicates that the company was effectively utilizing its working capital to support its sales activities during this period.
However, from March 31, 2021, to June 30, 2022, the ratio fluctuated within a narrower range, showing some volatility in the management of working capital efficiency. There was a slight decrease to 1.80 on June 30, 2021, followed by a recovery to 2.30 on March 31, 2022. This suggests that there may have been some challenges in optimizing working capital usage during this period.
Subsequently, from June 30, 2022, to December 31, 2024, the working capital turnover ratio remained relatively stable, fluctuating between 1.55 and 2.24. The decreasing trend observed during this period indicates a decline in the efficiency of using working capital to drive sales, possibly signaling potential inefficiencies in managing the company's working capital resources.
Overall, while there were periods of improvement in working capital turnover, the fluctuations and declining trend in the later years of the analyzed period suggest the need for MGP Ingredients Inc to focus on enhancing its working capital management strategies to sustainably optimize its operational efficiency and profitability.