Reliance Steel & Aluminum Co (RS)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 13,835,000 | 14,805,900 | 17,025,000 | 14,093,300 | 8,811,900 |
| Total current assets | US$ in thousands | 3,895,500 | 4,771,800 | 4,886,600 | 4,160,100 | 3,112,800 |
| Total current liabilities | US$ in thousands | 1,213,000 | 843,600 | 1,375,300 | 1,065,000 | 613,000 |
| Working capital turnover | 5.16 | 3.77 | 4.85 | 4.55 | 3.53 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $13,835,000K ÷ ($3,895,500K – $1,213,000K)
= 5.16
Working capital turnover is a financial ratio that measures a company's efficiency in using its working capital to generate sales. In the case of Reliance Steel & Aluminum Co, the working capital turnover has shown an upward trend over the past five years, increasing from 3.53 in 2020 to 5.16 in 2024.
This indicates that the company has been more effective in utilizing its working capital to support its revenue-generating activities. A higher working capital turnover ratio suggests that the company is able to efficiently manage its short-term assets and liabilities to drive sales growth.
However, it is important to note that the working capital turnover ratio should be analyzed in conjunction with other financial metrics to gain a comprehensive understanding of the company's overall financial performance and efficiency.