NXP Semiconductors NV (NXPI)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,614,000 | 13,276,000 | 13,205,000 | 11,063,000 | 8,612,000 |
| Total current assets | US$ in thousands | 7,305,000 | 7,864,000 | 6,935,000 | 5,228,000 | 4,324,000 |
| Total current liabilities | US$ in thousands | 3,098,000 | 4,111,000 | 3,270,000 | 2,452,000 | 2,017,000 |
| Working capital turnover | 3.00 | 3.54 | 3.60 | 3.99 | 3.73 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $12,614,000K ÷ ($7,305,000K – $3,098,000K)
= 3.00
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio indicates better efficiency in managing working capital.
For NXP Semiconductors NV, the working capital turnover has shown some fluctuations over the years. In 2020, the ratio was 3.73, which increased to 3.99 in 2021, indicating an improvement in the efficiency of working capital utilization. However, in the following years, the ratio slightly decreased to 3.60 in 2022, 3.54 in 2023, and further down to 3.00 in 2024.
The dip in the ratio from 2021 onwards suggests a decrease in the efficiency of converting working capital into sales. This could be due to changes in the company's operating cycle, inventory management, or accounts payable and receivable practices.
Overall, while the working capital turnover ratio for NXP Semiconductors NV has shown some variability, it is essential for the company to closely monitor and manage its working capital to ensure optimal efficiency in the utilization of resources and drive sustainable growth in the long run.
Peer comparison
Dec 31, 2024