NewMarket Corporation (NEU)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	2,657,060	2,718,050	2,315,890	1,998,090	2,157,050
Total current assets	US$ in thousands	1,039,570	1,192,120	1,388,170	898,078	879,398
Total current liabilities	US$ in thousands	364,164	423,887	725,087	312,455	308,895
Working capital turnover		3.93	3.54	3.49	3.41	3.78

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,657,060K ÷ ($1,039,570K – $364,164K)
= 3.93

NewMarket Corp.'s working capital turnover ratio has shown a fluctuating trend over the past five years. The ratio increased from 3.84 in 2019 to 3.55 in 2021, indicating an improvement in the company's ability to efficiently utilize its working capital to generate sales. However, in 2022, the ratio decreased to 3.60 before picking up again to reach 4.00 in 2023.

A working capital turnover ratio of 4.00 in 2023 suggests that NewMarket Corp. generated $4.00 in net sales revenue for every $1.00 of working capital invested. This indicates that the company was able to effectively manage its working capital to support its revenue generation activities in 2023. Overall, an increasing trend in the working capital turnover ratio reflects improved efficiency in utilizing working capital to drive sales growth.