Reliance Steel & Aluminum Co (RS)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 14,805,900 | 17,025,000 | 14,093,300 | 8,811,900 | 10,973,800 |
| Total current assets | US$ in thousands | 4,771,800 | 4,886,600 | 4,160,100 | 3,112,800 | 3,010,200 |
| Total current liabilities | US$ in thousands | 843,600 | 1,375,300 | 1,065,000 | 613,000 | 675,300 |
| Working capital turnover | 3.77 | 4.85 | 4.55 | 3.53 | 4.70 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $14,805,900K ÷ ($4,771,800K – $843,600K)
= 3.77
The working capital turnover ratio of Reliance Steel & Aluminum Co. has fluctuated over the past five years. The company's ability to efficiently utilize its working capital has varied during this period. In 2023, the working capital turnover ratio was 3.77, which decreased from 4.85 in 2022 and 4.55 in 2021. This suggests a decline in the company's efficiency in generating revenue from its working capital in 2023 compared to the previous two years.
Moreover, the working capital turnover ratio of 3.77 in 2023 is lower than the ratio of 4.70 in 2019, indicating a downward trend in the company's working capital utilization efficiency over the past five years. A lower working capital turnover ratio may indicate that the company is struggling to efficiently convert its working capital into sales revenue.
It is important for Reliance Steel & Aluminum Co. to closely monitor and manage its working capital turnover to ensure optimal performance and efficiency in its operations. A higher working capital turnover ratio would indicate that the company is effectively utilizing its working capital to generate revenue, while a lower ratio may signal inefficiencies that need to be addressed to improve overall financial performance.
Peer comparison
Dec 31, 2023