Polaris Industries Inc (PII)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,175,400 | 8,934,400 | 8,589,000 | 8,198,200 | 7,027,900 |
| Total current assets | US$ in thousands | 2,632,400 | 2,691,700 | 2,767,600 | 2,559,000 | 2,207,500 |
| Total current liabilities | US$ in thousands | 2,293,200 | 1,933,800 | 2,328,600 | 2,230,100 | 1,889,400 |
| Working capital turnover | 21.15 | 11.79 | 19.56 | 24.93 | 22.09 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,175,400K ÷ ($2,632,400K – $2,293,200K)
= 21.15
Over the past five years, Polaris Industries Inc has shown varying levels of efficiency in managing its working capital. The working capital turnover ratio measures how well a company utilizes its working capital to generate sales revenue. From the data provided, we can observe fluctuations in the working capital turnover ratio for the company.
In 2020, the working capital turnover ratio was 22.09, indicating that Polaris efficiently converted its working capital into sales during that year. The ratio increased in 2021 to 24.93, suggesting an improvement in efficiency in utilizing working capital to generate revenue.
However, in 2022, there was a notable decline in the working capital turnover ratio to 19.56, which may indicate a decrease in efficiency in managing working capital to drive sales. This was followed by a further decrease in 2023 to 11.79, which signals a significant drop in the company's ability to convert working capital into revenue.
In 2024, there was a rebound in the working capital turnover ratio to 21.15, reflecting an improvement in utilizing working capital effectively to generate sales, albeit not reaching the levels seen in 2021.
Overall, the fluctuating trend in Polaris Industries Inc's working capital turnover ratio over the five-year period suggests varying levels of efficiency in managing working capital to drive sales revenue. It is essential for the company to closely monitor and optimize its working capital management to maintain healthy operational efficiency and financial performance.