Pilgrims Pride Corp (PPC)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 17,897,700 | 17,112,600 | 17,295,900 | 14,639,400 | 11,996,600 |
| Total current assets | US$ in thousands | 5,120,160 | 4,204,470 | 3,891,620 | 3,305,950 | 2,902,710 |
| Total current liabilities | US$ in thousands | 2,552,130 | 2,495,870 | 2,570,170 | 2,390,820 | 1,937,580 |
| Working capital turnover | 6.97 | 10.02 | 13.09 | 16.00 | 12.43 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $17,897,700K ÷ ($5,120,160K – $2,552,130K)
= 6.97
Working capital turnover is an important efficiency ratio that measures how well a company utilizes its working capital to generate sales revenue. Looking at the data provided for Pilgrims Pride Corp for the past five years, we observe fluctuations in the working capital turnover ratio:
1. In December 2020, the working capital turnover ratio was 12.43. This indicates that for every dollar of working capital invested, the company generated $12.43 in sales revenue.
2. The ratio improved significantly to 16.00 by December 2021, showing that the company became more efficient in utilizing its working capital to generate sales.
3. However, there was a slight decline in the ratio to 13.09 by December 2022, which suggests a potential decrease in efficiency in working capital management compared to the previous year.
4. The ratio dropped further to 10.02 by December 2023, indicating a decrease in the company's ability to convert working capital into sales revenue efficiently.
5. The most significant decline was seen by December 2024, where the working capital turnover ratio fell to 6.97. This suggests that the company may be facing challenges in effectively managing its working capital to drive sales revenue.
Overall, the fluctuation in Pilgrims Pride Corp's working capital turnover ratio over the past five years indicates varying levels of efficiency in utilizing its working capital. Further analysis and investigation into the company's working capital management practices may be required to understand the reasons behind these fluctuations and to identify opportunities for improvement.
Peer comparison
Dec 31, 2024