Netflix Inc (NFLX)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 33,723,300 | 31,615,600 | 29,697,800 | 24,996,100 | 20,156,400 |
| Total current assets | US$ in thousands | 9,918,130 | 9,266,470 | 8,069,820 | 9,761,580 | 6,178,500 |
| Total current liabilities | US$ in thousands | 8,860,660 | 7,930,970 | 8,488,970 | 7,805,780 | 6,855,700 |
| Working capital turnover | 31.89 | 23.67 | — | 12.78 | — |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $33,723,300K ÷ ($9,918,130K – $8,860,660K)
= 31.89
The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. It is calculated by dividing net sales by average working capital.
Based on the provided data, Netflix Inc.'s working capital turnover has shown significant variation over the years. In 2023, the working capital turnover ratio was 31.89, indicating that the company generated approximately $31.89 in sales for every dollar of working capital. This suggests a high level of efficiency in utilizing its working capital to generate revenue.
Comparing this to previous years, there has been a consistent improvement in the efficiency of working capital utilization. In 2022, the ratio was 23.67, which also reflects strong efficiency. However, the absence of data for 2021 and 2020 means that a year-on-year comparison cannot be made for those periods.
Overall, the increasing trend in the working capital turnover ratio indicates that Netflix Inc. has been effectively managing its working capital to drive sales growth and operational efficiency. However, it would be beneficial to consider the context of the company's industry and specific operational strategies when interpreting this ratio.