Resideo Technologies Inc (REZI)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 6,177,000 | 6,308,000 | 5,786,000 | 10,080,000 | 9,917,000 |
| Total current assets | US$ in thousands | 2,743,000 | 2,502,000 | 2,541,000 | 2,225,000 | 1,785,000 |
| Total current liabilities | US$ in thousands | 1,525,000 | 1,546,000 | 1,494,000 | 1,538,000 | 1,494,000 |
| Working capital turnover | 5.07 | 6.60 | 5.53 | 14.67 | 34.08 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $6,177,000K ÷ ($2,743,000K – $1,525,000K)
= 5.07
The working capital turnover of Resideo Technologies Inc has shown some fluctuations over the past five years. In 2019, the working capital turnover was at its highest level of 17.14, which indicates that the company generated $17.14 in sales for every dollar of working capital invested. This high ratio suggests that the company efficiently managed its working capital to generate sales.
However, in the subsequent years, the working capital turnover ratio decreased significantly. In 2020, the ratio dropped to 7.38, indicating a decline in efficiency in utilizing working capital to generate sales. This could be a cause for concern as it suggests potential inefficiencies in managing the company's working capital.
In 2021, there was a slight improvement in the working capital turnover to 5.58, but it remained below the levels seen in 2019 and 2020. The ratio further increased to 6.66 in 2022, indicating a better utilization of working capital compared to the previous year.
In the most recent year, 2023, the working capital turnover ratio decreased again to 5.13. This indicates a decline in efficiency in utilizing working capital to generate sales compared to the previous year.
Overall, the trend in Resideo Technologies Inc's working capital turnover shows fluctuations over the five-year period, with the company experiencing highs and lows in efficiency in managing working capital to generate sales. It will be important for the company to closely monitor and improve its working capital management practices to enhance operational efficiency and financial performance.