PACCAR Inc (PCAR)

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	35,127,400	34,180,300	32,542,800	30,820,400	28,819,700	27,376,300	25,464,200	24,149,400	23,522,300	22,404,800	22,194,000	19,412,300	18,728,500	19,277,100	20,708,100	24,273,800	25,599,700	25,762,200	25,152,000	24,329,300
Total current assets	US$ in thousands	13,434,100	12,366,000	11,682,200	10,878,400	10,277,500	9,163,500	8,886,200	8,822,300	1,976,000	7,640,300	7,983,600	7,766,400	7,253,400	6,902,400	6,552,000	6,875,200	7,628,700	7,664,600	3,219,400	2,842,600
Total current liabilities	US$ in thousands	23,800	7,371,300	7,484,200	7,514,200	18,000	5,971,800	6,227,900	6,325,900	19,600	5,583,700	5,881,400	5,823,400	25,500	5,271,300	4,969,500	5,156,500	39,900	5,557,800	5,556,900	5,592,800
Working capital turnover		2.62	6.84	7.75	9.16	2.81	8.58	9.58	9.67	12.02	10.89	10.56	9.99	2.59	11.82	13.09	14.12	3.37	12.23	—	—

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $35,127,400K ÷ ($13,434,100K – $23,800K)
= 2.62

The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales. A higher ratio indicates better efficiency in managing working capital.

Analyzing Paccar Inc.'s working capital turnover over the past eight quarters, we observe fluctuations in the ratio. In the most recent quarter, Q4 2023, the ratio stands at 3.49, showing a slight increase from the previous quarter.

Comparing Q4 2023 to the same quarter a year ago, Q4 2022, we identify a decrease in the ratio, indicating a potential decline in the efficiency of working capital utilization.

Overall, Paccar Inc. has maintained a working capital turnover ratio above 3 for the past eight quarters, suggesting a relatively efficient management of working capital in generating sales. However, management should continue monitoring this ratio to ensure optimal utilization of working capital resources.