Resideo Technologies Inc (REZI)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 6,761,000 | 6,242,000 | 6,370,000 | 5,846,000 | 5,071,000 |
| Total current assets | US$ in thousands | 3,172,000 | 2,743,000 | 2,502,000 | 2,541,000 | 2,225,000 |
| Total current liabilities | US$ in thousands | 1,790,000 | 1,525,000 | 1,546,000 | 1,494,000 | 1,538,000 |
| Working capital turnover | 4.89 | 5.12 | 6.66 | 5.58 | 7.38 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $6,761,000K ÷ ($3,172,000K – $1,790,000K)
= 4.89
The working capital turnover of Resideo Technologies Inc has shown a downward trend over the past five years, declining from 7.38 in December 31, 2020, to 4.89 in December 31, 2024. This indicates that the company's efficiency in utilizing its working capital to generate sales has decreased over the period. A higher working capital turnover ratio is generally preferred as it signifies that the company is able to generate more revenue with the same investment in working capital. The decreasing trend in this ratio may suggest potential inefficiencies in managing working capital or slower sales generation relative to the invested working capital. Resideo Technologies Inc may need to review its working capital management strategies to improve efficiency and optimize its use of resources.