Nordson Corporation (NDSN)
Working capital turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,568,040 | 2,568,450 | 2,336,130 | 2,088,460 | 2,146,130 |
| Total current assets | US$ in thousands | 1,229,310 | 1,132,970 | 1,164,840 | 1,020,610 | 1,011,200 |
| Total current liabilities | US$ in thousands | 582,089 | 834,203 | 445,394 | 363,089 | 477,626 |
| Working capital turnover | 3.97 | 8.60 | 3.25 | 3.18 | 4.02 |
October 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,568,040K ÷ ($1,229,310K – $582,089K)
= 3.97
Analyzing Nordson Corp.'s working capital turnover over the past five years shows fluctuations in the efficiency of its working capital management. Working capital turnover indicates how effectively a company is using its working capital to generate sales revenue. A higher turnover ratio suggests that the company is effectively utilizing its working capital to support sales, while a lower turnover ratio indicates inefficiency in working capital management.
In 2023, the working capital turnover ratio was 4.06, reflecting a decrease compared to the previous year's ratio of 8.67. This decline may imply that Nordson Corp. was less efficient in utilizing its working capital to support sales revenue during 2023. However, compared to 2021 and 2020, the current year's turnover ratio still demonstrates an improvement in working capital management.
It's worth noting that Nordson Corp.'s working capital turnover has shown volatility in the past five years. While the ratio was relatively high in 2022, it dropped significantly in 2021, and then slightly improved in 2023. This fluctuation suggests potential variability in Nordson Corp.'s ability to efficiently convert its working capital into sales, reflecting changes in the company's operational activities and financial performance.
Overall, Nordson Corp. should continue monitoring and evaluating its working capital turnover to ensure efficient management of its working capital, which plays a crucial role in supporting the company's ongoing operations and growth.
Peer comparison
Oct 31, 2023