Pool Corporation (POOL)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 5,541,600 | 6,179,730 | 5,295,580 | 3,936,620 | 3,199,520 |
| Total current assets | US$ in thousands | 1,815,360 | 2,018,990 | 1,769,080 | 1,121,930 | 973,568 |
| Total current liabilities | US$ in thousands | 770,766 | 675,714 | 744,416 | 483,249 | 390,846 |
| Working capital turnover | 5.31 | 4.60 | 5.17 | 6.16 | 5.49 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $5,541,600K ÷ ($1,815,360K – $770,766K)
= 5.31
The working capital turnover ratio measures how effectively a company is utilizing its working capital to generate sales revenue. A higher ratio indicates that the company is efficiently using its working capital to support sales growth.
Pool Corporation's working capital turnover has fluctuated over the past five years, ranging from 4.60 in 2022 to 6.16 in 2020. In 2023, the ratio increased to 5.31, indicating that the company improved its efficiency in utilizing working capital to generate sales compared to the previous year.
Despite the fluctuations, Pool Corporation's working capital turnover ratios have generally been above 5, which suggests that the company is effectively managing its working capital to support sales activity. However, it is essential to consider other factors such as industry benchmarks and trend analysis to gain a more comprehensive understanding of the company's working capital management efficiency.