PACCAR Inc (PCAR)

Working capital turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue US$ in thousands 33,663,800 35,127,400 28,819,700 23,522,300 18,728,500
Total current assets US$ in thousands 13,950,800 32,031,400 10,277,500 1,976,000 7,253,400
Total current liabilities US$ in thousands 29,400 23,800 18,000 19,600 25,500
Working capital turnover 2.42 1.10 2.81 12.02 2.59

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $33,663,800K ÷ ($13,950,800K – $29,400K)
= 2.42

The working capital turnover ratio for PACCAR Inc has experienced fluctuations over the past five years. In 2020, the ratio was 2.59, indicating that the company generated $2.59 in revenue for every dollar of working capital invested. This ratio significantly improved in 2021 to 12.02, suggesting a much more efficient utilization of working capital to generate revenue.

However, in the subsequent years, the ratio decreased, reaching its lowest point in 2023 at 1.10. This decline could indicate potential inefficiencies in managing working capital during that period. In 2024, the ratio improved slightly to 2.42, but it remained below the levels seen in 2021.

Overall, the working capital turnover ratio for PACCAR Inc has shown variability, with significant fluctuations observed between the years. It is essential for the company to monitor and manage its working capital effectively to ensure optimal utilization and efficiency in generating revenue.