NVR Inc (NVR)

Working capital turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue US$ in thousands 10,524,500 9,518,200 10,526,400 8,951,020 7,536,920
Total current assets US$ in thousands 5,837,880 5,194,590 4,700,190 4,904,830 2,809,780
Total current liabilities US$ in thousands 332,772 1,222,730 832,646 823,814 843,258
Working capital turnover 1.91 2.40 2.72 2.19 3.83

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $10,524,500K ÷ ($5,837,880K – $332,772K)
= 1.91

The working capital turnover of NVR Inc has shown some fluctuations over the years. In December 31, 2020, the working capital turnover was 3.83, indicating that the company generated $3.83 of revenue for every dollar of working capital invested.

However, in the following years, the working capital turnover decreased. By December 31, 2021, it decreased to 2.19, signaling a lower efficiency in converting working capital into revenue. The ratio then improved in December 31, 2022, reaching 2.72, before declining again to 2.40 in December 31, 2023.

The most significant drop occurred by December 31, 2024, where the working capital turnover ratio decreased to 1.91. This suggests that the company's ability to efficiently utilize its working capital to generate sales has deteriorated, indicating a potential need to assess and improve the management of working capital.