NewMarket Corporation (NEU)

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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	2,657,060	2,693,036	2,722,787	2,764,467	2,718,052	2,610,742	2,535,924	2,401,221	2,315,892	2,282,767	2,176,308	1,998,315	1,990,356	1,997,020	2,039,447	2,191,264	2,167,555	2,171,422	2,177,951	2,215,662
Total current assets	US$ in thousands	1,039,570	1,065,590	1,140,100	1,131,560	1,192,120	1,174,100	1,160,960	1,114,330	1,388,170	1,366,860	1,423,470	1,352,470	898,078	854,362	790,024	930,934	879,398	826,933	829,434	856,146
Total current liabilities	US$ in thousands	364,164	332,204	349,038	358,496	423,887	426,135	446,634	411,699	725,087	391,397	372,125	335,853	312,455	308,899	233,983	312,912	308,895	280,478	283,479	259,973
Working capital turnover		3.93	3.67	3.44	3.58	3.54	3.49	3.55	3.42	3.49	2.34	2.07	1.97	3.40	3.66	3.67	3.55	3.80	3.97	3.99	3.72

December 31, 2023 calculation

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

The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio indicates better efficiency in using current assets to support sales.

Analyzing NewMarket Corp.'s working capital turnover over the past eight quarters, we observe fluctuation but generally healthy performance. In Q4 2023, the working capital turnover ratio improved to 4.00 from 3.73 in Q3 2023, indicating the company effectively generated sales from its working capital. This could suggest improved management of current assets and liabilities to support business operations.

Comparing the latest ratio to the figures from the previous quarters, NewMarket Corp. maintained a consistent trend of above 3.50, demonstrating a relatively stable efficiency in utilizing working capital across the year. This signifies the company's ability to efficiently turn its current assets into sales multiple times within a year, which indicates effective management of resources.

Overall, NewMarket Corp.'s working capital turnover ratio has shown resilience and effectiveness in optimizing its working capital to drive revenue generation. Continued monitoring of this ratio can provide insights into the company's operational efficiency and financial health in the future.