Perrigo Company PLC (PRGO)

Working capital turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue US$ in thousands 4,373,400 4,655,600 4,451,600 4,138,700 5,063,300
Total current assets US$ in thousands 2,481,900 2,832,900 2,719,900 3,859,900 3,133,500
Total current liabilities US$ in thousands 1,044,200 1,586,300 1,113,600 1,587,900 1,382,000
Working capital turnover 3.04 3.73 2.77 1.82 2.89

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,373,400K ÷ ($2,481,900K – $1,044,200K)
= 3.04

The working capital turnover ratio of Perrigo Company PLC has shown some fluctuations over the years, ranging from 1.82 to 3.73.

In 2021, the ratio decreased to 1.82, indicating that the company generated $1.82 in revenue for every $1 of working capital invested. This may suggest a temporary inefficiency in managing its working capital.

However, in the following years, the ratio increased significantly, reaching 3.73 by the end of 2023. This sharp increase suggests that Perrigo improved its efficiency in utilizing working capital to generate revenue, potentially through better inventory management, collection of receivables, or payment of payables.

By the end of 2024, the ratio slightly decreased to 3.04, but still remained at a relatively high level compared to 2021. This implies that Perrigo continued to effectively leverage its working capital to generate sales.

Overall, the trend of increasing working capital turnover ratio indicates that Perrigo has become more efficient in utilizing its resources to generate revenue, which can be a positive sign of operational efficiency and financial health.