Polaris Industries Inc (PII)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,809,400 | 8,517,300 | 8,117,900 | 6,963,800 | 6,704,930 |
| Total current assets | US$ in thousands | 2,691,700 | 2,767,600 | 2,559,000 | 2,207,500 | 1,627,000 |
| Total current liabilities | US$ in thousands | 1,933,800 | 2,328,600 | 2,230,100 | 1,889,400 | 1,528,000 |
| Working capital turnover | 11.62 | 19.40 | 24.68 | 21.89 | 67.73 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $8,809,400K ÷ ($2,691,700K – $1,933,800K)
= 11.62
The working capital turnover ratio for Polaris Inc has exhibited a decreasing trend over the past five years, declining from 68.53 in 2019 to 11.79 in 2023. This indicates that the company is generating lower sales revenue relative to its working capital in recent years.
A high working capital turnover ratio is generally considered favorable as it suggests that the company is efficiently utilizing its working capital to generate revenue. Conversely, a decreasing ratio may signify inefficiency in managing working capital, potentially due to factors such as slow inventory turnover or difficulties in collecting receivables.
It is important for Polaris Inc to closely monitor its working capital turnover ratio and investigate the reasons behind the decline. Implementing strategies to improve inventory management, streamline accounts receivable processes, and optimize working capital utilization can help enhance the company's operational efficiency and financial performance.