MP Materials Corp (MP)
Working capital turnover
| 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 | 247,383 | 293,977 | 367,165 | 450,415 | 524,822 | 532,150 | 508,683 | 438,239 | 331,952 | 275,021 | 216,289 | 172,496 | 132,441 | |||
| Total current assets | US$ in thousands | 1,131,180 | 1,188,310 | 1,223,880 | 1,267,390 | 1,293,830 | 1,356,780 | 1,348,870 | 1,316,470 | 1,276,810 | 1,255,550 | 1,246,110 | 1,239,120 | 561,047 | 1,243 | 1,881 | 566 |
| Total current liabilities | US$ in thousands | 108,550 | 97,012 | 75,773 | 93,874 | 97,481 | 74,746 | 66,147 | 51,575 | 59,543 | 70,767 | 90,287 | 72,921 | 43,061 | 3,533 | 1,072 | 547 |
| Working capital turnover | 0.24 | 0.27 | 0.32 | 0.38 | 0.44 | 0.42 | 0.40 | 0.35 | 0.27 | 0.23 | 0.19 | 0.15 | 0.26 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $247,383K ÷ ($1,131,180K – $108,550K)
= 0.24
The working capital turnover ratio of MP Materials Corporation has been fluctuating over the past eight quarters. It decreased from 0.44 in Q4 2022 to 0.25 in Q4 2023, indicating a lower efficiency in utilizing working capital to generate revenue during that quarter. However, there was a gradual improvement in the ratio over the next three quarters, reaching 0.39 in Q1 2023, suggesting better management of working capital.
The trend continued with further improvements in Q2 and Q3 2023, where the working capital turnover ratios were 0.33 and 0.28, respectively. This indicates that the company became more effective in using its working capital to support its operations and generate sales during these periods.
Overall, the company's working capital turnover ratio has shown some volatility but has generally trended upwards in recent quarters. This suggests a positive shift towards more efficient management of working capital, which could lead to improved financial performance and profitability in the future. It is important for MP Materials Corporation to continue monitoring and optimizing its working capital turnover to ensure sustainable growth and financial health.
Peer comparison
Dec 31, 2023