Perrigo Company PLC (PRGO)

Working capital turnover

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Revenue (ttm)	US$ in thousands	4,428,700	4,556,100	4,655,500	4,653,900	4,630,300	4,558,900	4,451,700	4,401,300	4,343,800	4,203,200	4,138,700	4,323,300	4,494,300	4,732,300	5,063,300	5,096,600	5,074,000	5,003,900	4,837,400	4,709,800
Total current assets	US$ in thousands	2,959,100	2,806,400	2,832,900	2,765,300	2,773,000	2,740,700	2,719,900	2,583,300	2,651,500	3,935,500	3,859,900	4,225,900	4,420,200	4,488,600	3,133,500	3,398,300	3,803,500	3,046,200	2,730,600	2,739,800
Total current liabilities	US$ in thousands	1,488,100	1,554,500	1,586,300	1,008,400	1,056,900	1,086,800	1,113,600	1,015,000	1,014,600	981,300	1,587,900	2,003,800	1,984,500	1,446,800	1,382,000	1,336,300	1,859,700	1,635,000	1,335,800	1,324,700
Working capital turnover		3.01	3.64	3.73	2.65	2.70	2.76	2.77	2.81	2.65	1.42	1.82	1.95	1.85	1.56	2.89	2.47	2.61	3.55	3.47	3.33

June 30, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,428,700K ÷ ($2,959,100K – $1,488,100K)
= 3.01

Perrigo Company PLC's working capital turnover ratio has fluctuated over the past 20 quarters, ranging from a low of 1.42 to a high of 3.73. The company's working capital turnover has shown a general upward trend, indicating an improvement in the efficiency of utilizing working capital to generate sales. However, there are periods where the ratio decreases, suggesting potential inefficiencies in managing working capital during those quarters.

The working capital turnover ratio measures how efficiently a company is using its working capital to support sales activities. A higher ratio typically indicates that the company is generating more sales revenue for each unit of working capital invested, which is generally considered favorable.

It is important for Perrigo Company PLC to continuously monitor and optimize its working capital management practices to maintain a healthy balance between liquidity and profitability. By improving the efficiency of working capital turnover, the company can enhance cash flow, reduce financing costs, and increase overall operational effectiveness.