Resideo Technologies Inc (REZI)
Working capital turnover
| Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 6,761,000 | 6,440,000 | 6,166,000 | 6,179,000 | 6,242,000 | 6,265,000 | 6,329,000 | 6,413,000 | 6,370,000 | 6,264,000 | 6,142,000 | 5,933,000 | 5,846,000 | 5,893,000 | 5,759,000 | 5,311,000 | 5,071,000 | 4,874,000 | 4,738,000 | 4,951,000 |
| Total current assets | US$ in thousands | 3,172,000 | 3,037,000 | 2,884,000 | 2,677,000 | 2,743,000 | 2,615,000 | 2,622,000 | 2,495,000 | 2,502,000 | 2,450,000 | 2,481,000 | 2,339,000 | 2,541,000 | 2,507,000 | 2,356,000 | 2,220,000 | 2,225,000 | 1,923,000 | 1,843,000 | 1,993,000 |
| Total current liabilities | US$ in thousands | 1,790,000 | 1,672,000 | 1,594,000 | 1,385,000 | 1,525,000 | 1,467,000 | 1,524,000 | 1,469,000 | 1,546,000 | 1,542,000 | 1,579,000 | 1,546,000 | 1,494,000 | 1,532,000 | 1,511,000 | 1,446,000 | 1,538,000 | 1,645,000 | 1,662,000 | 1,755,000 |
| Working capital turnover | 4.89 | 4.72 | 4.78 | 4.78 | 5.12 | 5.46 | 5.76 | 6.25 | 6.66 | 6.90 | 6.81 | 7.48 | 5.58 | 6.04 | 6.82 | 6.86 | 7.38 | 17.53 | 26.18 | 20.80 |
December 31, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $6,761,000K ÷ ($3,172,000K – $1,790,000K)
= 4.89
The working capital turnover ratio of Resideo Technologies Inc has shown a decreasing trend over the past few years, indicating a decline in the efficiency of the company in managing its working capital.
The ratio was relatively high at the beginning of the analyzed period, standing at 20.80 on March 31, 2020, but has steadily declined quarter by quarter. By December 31, 2024, the working capital turnover had decreased to 4.89, reflecting a significant drop in the company's ability to efficiently utilize its working capital to generate sales.
A lower working capital turnover ratio suggests that Resideo Technologies Inc may be struggling to efficiently turn its current assets into sales revenue. This could potentially be an indicator of liquidity issues, inefficient inventory management, or difficulties in managing accounts receivable and accounts payable effectively.
Overall, the declining trend in the working capital turnover ratio highlights the importance for Resideo Technologies Inc to improve its working capital management practices to enhance operational efficiency and financial performance in the future.