Novanta Inc (NOVT)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 949,722 | 879,785 | 859,523 | 705,061 | 588,129 |
| Total current assets | US$ in thousands | 433,648 | 415,297 | 420,519 | 373,825 | 304,173 |
| Total current liabilities | US$ in thousands | 167,791 | 139,175 | 164,522 | 183,938 | 114,229 |
| Working capital turnover | 3.57 | 3.19 | 3.36 | 3.71 | 3.10 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $949,722K ÷ ($433,648K – $167,791K)
= 3.57
The working capital turnover ratio measures how efficiently a company is using its working capital to generate revenue. Looking at the data provided, we can see that Novanta Inc's working capital turnover has shown some fluctuations over the past five years. In December 2020, the ratio was at 3.10, indicating that the company generated $3.10 of revenue for every $1 of working capital invested.
Subsequently, in December 2021, the ratio improved to 3.71, suggesting that Novanta Inc became more efficient in utilizing its working capital to generate revenue. However, in December 2022, the ratio decreased to 3.36, indicating a slight drop in efficiency compared to the previous year.
By December 2023, the working capital turnover ratio further declined to 3.19, signaling a potential inefficiency in utilizing working capital to generate revenue. Finally, by December 2024, the ratio increased to 3.57, showing a slight improvement in efficiency compared to the previous year.
Overall, Novanta Inc's working capital turnover ratio has experienced fluctuations over the years, which may imply variations in the company's working capital management and revenue generation efficiency. It is essential for the company to monitor and potentially improve this ratio to enhance its financial performance and operational efficiency.
Peer comparison
Dec 31, 2024