nVent Electric PLC (NVT)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,006,100 | 3,263,600 | 2,909,000 | 2,462,000 | 1,998,600 |
| Total current assets | US$ in thousands | 1,389,300 | 1,336,100 | 1,229,200 | 911,500 | 764,400 |
| Total current liabilities | US$ in thousands | 801,600 | 733,600 | 649,500 | 636,300 | 450,000 |
| Working capital turnover | 5.12 | 5.42 | 5.02 | 8.95 | 6.36 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,006,100K ÷ ($1,389,300K – $801,600K)
= 5.12
nVent Electric PLC has shown varying levels of efficiency in managing its working capital turnover over the past five years. The working capital turnover ratio, which measures how efficiently the company is utilizing its working capital to generate sales revenue, increased from 6.36 in December 2020 to 8.95 in December 2021, indicating an improvement in the company's ability to convert its working capital into sales.
However, in the subsequent years, there was a decline in the working capital turnover ratio, reaching 5.02 in December 2022, 5.42 in December 2023, and 5.12 in December 2024. This downward trend suggests a potential decrease in the company's efficiency in managing its working capital to support sales activities.
It is important for nVent Electric PLC to closely monitor its working capital turnover ratio and take appropriate measures to improve efficiency in the utilization of its working capital resources to sustain and enhance its operational performance.
Peer comparison
Dec 31, 2024