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.