NVR Inc (NVR)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	9,518,200	10,526,400	8,951,020	7,536,920	7,388,660
Total current assets	US$ in thousands	5,194,590	4,700,190	4,904,830	2,809,780	1,160,800
Total current liabilities	US$ in thousands	1,222,730	832,646	823,814	843,258	653,007
Working capital turnover		2.40	2.72	2.19	3.83	14.55

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $9,518,200K ÷ ($5,194,590K – $1,222,730K)
= 2.40

The working capital turnover measures how efficiently a company is utilizing its working capital to generate revenue. A higher working capital turnover ratio indicates that the company is effectively managing its working capital.

Looking at the historical trend of NVR Inc.'s working capital turnover, we observe fluctuations in the ratio over the past five years. In 2023, the working capital turnover ratio decreased to 2.36 from 4.12 in 2022. This decline suggests that NVR Inc. may have experienced challenges in efficiently utilizing its working capital to generate revenue during the year.

Comparing 2023 to 2021 and 2020, the working capital turnover ratio remains lower, indicating a potential trend of decreased efficiency in working capital management over the past three years.

However, it is worth noting that the working capital turnover ratio in 2023 is still higher than that of 2019, showing that NVR Inc. was more efficient in utilizing its working capital in generating revenue compared to five years ago.

Overall, NVR Inc. should continue to monitor and improve its working capital turnover ratio to ensure optimal management of its working capital resources.