Phillips 66 (PSX)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	143,153,000	147,399,000	169,990,000	111,476,000	64,129,000
Total current assets	US$ in thousands	17,910,000	19,941,000	21,922,000	14,697,000	13,276,000
Total current liabilities	US$ in thousands	15,087,000	15,856,000	15,889,000	12,801,000	9,518,000
Working capital turnover		50.71	36.08	28.18	58.80	17.06

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $143,153,000K ÷ ($17,910,000K – $15,087,000K)
= 50.71

Working capital turnover, as calculated using the formula: Working Capital Turnover = Revenue / Average Working Capital, provides insights into how efficiently a company is utilizing its working capital to generate revenue.

Analyzing the data provided for Phillips 66, we observe a significant increase in the working capital turnover ratio from 17.06 in 2020 to 58.80 in 2021, indicating a substantial improvement in the efficiency of utilizing its working capital to generate revenue. This spike in the ratio could suggest better management of current assets and liabilities, resulting in increased revenue generation per unit of working capital.

However, the ratio experiences fluctuations in the subsequent years, with values of 28.18 in 2022, 36.08 in 2023, and 50.71 in 2024. Despite the fluctuations, the ratio remains relatively high compared to the initial value in 2020, indicating that Phillips 66 continued to efficiently utilize its working capital to generate revenue during these years.

Overall, the trend of the working capital turnover for Phillips 66 reflects varying levels of efficiency in utilizing working capital to drive revenue generation over the years, with a notable improvement in 2021 followed by fluctuations in subsequent years. This underscores the importance of closely monitoring working capital management to ensure sustained operational efficiency and profitability.