REX American Resources Corporation (REX)

Working capital turnover

Jan 31, 2024 Jan 31, 2023 Jan 31, 2022 Jan 31, 2021 Jan 31, 2020
Revenue US$ in thousands 833,384 855,000 774,802 372,664 417,700
Total current assets US$ in thousands 452,103 372,644 345,167 258,750 271,135
Total current liabilities US$ in thousands 66,259 54,599 50,483 30,737 31,599
Working capital turnover 2.16 2.69 2.63 1.63 1.74

January 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $833,384K ÷ ($452,103K – $66,259K)
= 2.16

The working capital turnover for REX American Resources Corporation has exhibited fluctuations over the past five fiscal years. The ratio decreased from 2.74 in January 2020 to 1.63 in January 2021 before showing a slight increase to 1.74 in January 2022. Subsequently, the ratio experienced an uptick to 2.63 in January 2023. However, in the most recent period ending January 2024, the working capital turnover improved significantly to 2.16.

A working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher ratio is generally indicative of more efficient working capital management, as the company is able to generate more revenue with its current level of working capital. In contrast, a lower ratio may signify inefficiencies in the utilization of working capital.

The varying trends in REX American Resources Corporation's working capital turnover suggest that the company's management of its working capital has been inconsistent over the years. It is crucial for the company to closely monitor and improve its working capital management practices to ensure optimal utilization of resources and sustained operational efficiency.