Planet Fitness Inc (PLNT)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 984,750 | 853,868 | 510,324 | 326,538 | 633,784 |
| Total current assets | US$ in thousands | 471,817 | 555,531 | 662,414 | 566,816 | 540,138 |
| Total current liabilities | US$ in thousands | 251,329 | 244,530 | 176,610 | 111,895 | 145,478 |
| Working capital turnover | 4.47 | 2.75 | 1.05 | 0.72 | 1.61 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $984,750K ÷ ($471,817K – $251,329K)
= 4.47
Based on the data provided, the working capital turnover ratio for Planet Fitness Inc has shown a significant increase over the years, indicating an improvement in the efficiency of the company's working capital management.
In 2023, the working capital turnover ratio stands at 4.86, reflecting that the company generated $4.86 in revenue for every dollar of working capital invested. This represents a substantial increase from 2022, where the ratio was 3.01.
The trend over the past five years shows fluctuation in the efficiency of working capital utilization. In 2021, the ratio was 1.21, indicating a relatively low turnover of working capital, which suggests that the company might have had challenges in efficiently deploying its current assets to generate revenue. However, there was a notable improvement in 2022 and a remarkable surge in 2023.
Overall, the increasing trend in the working capital turnover ratio signifies that Planet Fitness Inc has been able to enhance its operational efficiency and effectively utilize its working capital resources to drive revenue growth. This improvement indicates a positive development in the company's financial management and operational performance over the years.