RPM International Inc (RPM)
Working capital turnover
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,210,630 | 7,128,530 | 6,615,470 | 6,018,050 | 5,406,290 |
| Total current assets | US$ in thousands | 2,895,350 | 3,184,170 | 3,151,810 | 2,782,000 | 2,423,430 |
| Total current liabilities | US$ in thousands | 1,466,060 | 1,490,800 | 2,016,410 | 1,331,410 | 1,093,580 |
| Working capital turnover | 5.04 | 4.21 | 5.83 | 4.15 | 4.07 |
May 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,210,630K ÷ ($2,895,350K – $1,466,060K)
= 5.04
Working capital turnover is a financial ratio that measures a company's efficiency in utilizing its working capital to generate sales revenue. A higher working capital turnover indicates that the company is effectively using its current assets to support sales growth.
Based on the data provided for RPM International Inc, the working capital turnover has fluctuated over the past five years. In 2024, the working capital turnover was 5.04, which was an increase from the previous year's ratio of 4.21. This suggests that RPM International Inc improved its efficiency in utilizing working capital to generate sales revenue.
Comparing the ratios over the five-year period, there was a peak in 2022 with a working capital turnover of 5.83, indicating a high level of efficiency in utilizing working capital in that year. In contrast, there were lower ratios in 2021 and 2020, at 4.15 and 4.07 respectively, suggesting a lower level of efficiency during those periods.
Overall, the trend in working capital turnover for RPM International Inc shows variability but generally indicates a reasonable level of efficiency in utilizing working capital to support sales growth. It is essential for the company to continue monitoring and optimizing its working capital management to ensure sustainable performance in the future.
Peer comparison
May 31, 2024