PACCAR Inc (PCAR)

Working capital turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Revenue (ttm) US$ in thousands 33,663,800 34,832,900 35,289,400 35,398,400 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
Total current assets US$ in thousands 13,950,800 34,164,100 14,212,800 12,880,700 13,434,100 12,366,000 11,682,200 10,878,400 10,277,500 9,163,500 22,323,700 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
Total current liabilities US$ in thousands 29,400 11,894,000 6,380,100 7,642,500 23,800 7,371,300 7,484,200 7,514,200 18,000 5,971,800 8,776,200 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
Working capital turnover 2.42 1.56 4.51 6.76 2.62 6.84 7.75 9.16 2.81 8.58 1.88 9.67 12.02 10.89 10.56 9.99 2.59 11.82 13.09 14.12

December 31, 2024 calculation

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

PACCAR Inc's working capital turnover, a measure of how efficiently the company manages its working capital in generating sales, has fluctuated over the period provided.

The data indicates that the working capital turnover was relatively high in the first half of 2020, averaging around 13-14 times. This suggests that PACCAR was able to efficiently utilize its working capital to generate sales during that period.

However, there was a significant drop in the working capital turnover at the end of 2020, reaching as low as 2.59 times. This sharp decline may indicate potential issues in managing working capital efficiently or a decrease in sales relative to the working capital employed.

The ratio showed some recovery in the following quarters, reaching around 10-12 times by the end of 2021. This improvement indicates better utilization of working capital for generating sales.

In the years 2022 to 2024, the working capital turnover ratio continued to fluctuate, with some periods showing lower efficiency in working capital utilization, notably dropping to as low as 1.56 times in September 2024. These fluctuations may point to challenges in managing working capital effectively during these periods.

Overall, a declining trend in working capital turnover may signify inefficiencies in managing the company's working capital to generate sales, while an increasing trend indicates improved efficiency in this aspect. Tracking this ratio is important for understanding PACCAR's ability to efficiently convert working capital into sales revenue.