Otter Tail Corporation (OTTR)

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	1,353,476	1,345,528	1,371,328	1,433,652	1,469,475	1,492,823	1,425,261	1,310,829	1,197,635	1,083,525	1,002,986	910,134	883,171	878,934	871,831	908,278	919,503	924,998	924,008	921,153
Total current assets	US$ in thousands	570,170	556,750	524,112	454,365	452,752	460,493	471,389	402,391	369,354	334,967	304,901	258,963	234,832	274,916	266,923	256,184	254,860	237,659	263,566	273,701
Total current liabilities	US$ in thousands	309,757	310,033	300,562	262,464	237,636	241,853	288,153	373,155	387,699	510,087	483,484	459,429	436,786	299,736	232,923	175,688	189,741	253,187	206,149	200,721
Working capital turnover		5.20	5.45	6.13	7.47	6.83	6.83	7.78	44.84	—	—	—	—	—	—	25.64	11.28	14.12	—	16.09	12.62

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,353,476K ÷ ($570,170K – $309,757K)
= 5.20

The working capital turnover of Otter Tail Corporation has displayed some fluctuations over the past eight quarters. The ratio measures the efficiency of the company in utilizing its working capital to generate sales revenue.

In Q1 2022, the working capital turnover was significantly high at 44.81, indicating that the company was able to generate $44.81 of sales for every dollar of working capital. This could suggest that the company was efficiently managing its working capital to drive sales.

However, in subsequent quarters, the working capital turnover decreased, reaching a low of 5.18 in Q4 2023. This decline may imply that the company's ability to generate sales with its working capital decreased over time, potentially signaling inefficiencies in managing working capital or a slowdown in sales growth relative to the capital invested.

While a decreasing trend in working capital turnover could indicate potential issues, it is essential to assess the company's overall financial performance and liquidity position in conjunction with this ratio to gain a comprehensive understanding of Otter Tail Corporation's operational efficiency and financial health.