NVR Inc (NVR)

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	9,518,200	9,797,810	10,005,690	10,326,300	10,526,430	10,044,590	9,663,330	9,287,990	8,951,030	9,064,710	8,659,080	7,995,850	7,536,930	7,183,110	7,104,360	7,284,180	7,388,660	7,393,010	7,334,160	7,321,270
Total current assets	US$ in thousands	5,194,590	5,333,440	5,243,660	5,066,690	4,700,190	4,336,020	4,307,080	4,756,660	4,904,830	4,921,360	5,007,090	5,000,880	2,809,780	4,717,780	3,976,270	3,091,660	1,160,800	3,052,720	2,795,480	2,574,610
Total current liabilities	US$ in thousands	1,222,730	826,935	727,788	881,445	832,646	1,299,270	853,818	957,705	823,814	796,206	850,016	873,065	843,258	776,075	685,867	641,355	653,007	645,145	652,272	637,326
Working capital turnover		2.40	2.17	2.22	2.47	2.72	3.31	2.80	2.44	2.19	2.20	2.08	1.94	3.83	1.82	2.16	2.97	14.55	3.07	3.42	3.78

December 31, 2023 calculation

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

NVR Inc.'s working capital turnover has exhibited fluctuations over the past eight quarters, ranging from a low of 2.36 in Q4 2023 to a high of 5.09 in Q1 2022. A higher working capital turnover ratio indicates that the company is effectively utilizing its working capital to generate sales revenue.

The downward trend in working capital turnover from Q1 2022 to Q4 2023 suggests a potential decline in efficiency in utilizing working capital to support the company's operations and generate sales. A ratio below 1 would indicate that the company is not effectively utilizing its working capital to generate revenue, but all values in the table are above 1, indicating that NVR Inc. is effectively managing its working capital.

While the working capital turnover ratios for the most recent quarters are lower compared to the earlier quarters, the ratios remain relatively healthy overall. It is essential for NVR Inc. to monitor this metric closely to ensure efficient management of its working capital and sustainable growth in sales.