Middleby Corp (MIDD)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,045,300 | 4,060,950 | 3,250,490 | 2,510,360 | 2,958,550 |
| Total current assets | US$ in thousands | 1,965,860 | 2,006,000 | 1,707,080 | 1,270,490 | 1,209,200 |
| Total current liabilities | US$ in thousands | 851,094 | 988,284 | 914,888 | 700,258 | 593,137 |
| Working capital turnover | 3.63 | 3.99 | 4.10 | 4.40 | 4.80 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,045,300K ÷ ($1,965,860K – $851,094K)
= 3.63
Middleby Corp's working capital turnover has shown a decreasing trend over the past five years. It declined from 4.80 in 2019 to 3.63 in 2023. This indicates that the company is generating less revenue for each dollar of working capital invested in the business, suggesting a less efficient utilization of working capital in generating sales.
A lower working capital turnover ratio could signify issues with managing inventory, accounts receivable, or accounts payable. It may imply that the company is holding excess inventory, facing challenges in collecting receivables, or delaying payments to suppliers.
Middleby Corp may need to assess its working capital management practices to improve efficiency and optimize the utilization of its current assets to generate revenue. This could involve streamlining inventory levels, improving the collection of receivables, and managing payables more effectively to enhance overall liquidity and profitability.
Peer comparison
Dec 31, 2023