Reliance Steel & Aluminum Co (RS)
Working capital turnover
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 14,805,900 | 15,095,900 | 15,714,200 | 16,509,200 | 17,025,000 | 17,403,100 | 17,003,300 | 15,740,800 | 14,093,300 | 12,238,900 | 10,477,000 | 9,078,600 | 8,811,900 | 9,146,800 | 9,742,300 | 10,597,400 | 10,974,000 | 11,271,800 | 11,580,900 | 11,710,000 |
| Total current assets | US$ in thousands | 4,771,800 | 4,859,100 | 4,858,300 | 4,712,100 | 4,886,600 | 4,811,200 | 5,023,900 | 4,744,000 | 4,160,100 | 4,284,000 | 3,944,600 | 3,584,700 | 3,112,800 | 3,032,000 | 2,726,700 | 3,086,400 | 3,010,200 | 3,165,000 | 3,365,900 | 3,560,800 |
| Total current liabilities | US$ in thousands | 843,600 | 878,700 | 937,800 | 975,400 | 1,375,300 | 1,479,200 | 1,665,600 | 1,198,300 | 1,065,000 | 1,007,100 | 904,900 | 823,700 | 613,000 | 601,900 | 642,000 | 735,600 | 675,300 | 788,500 | 760,800 | 877,400 |
| Working capital turnover | 3.77 | 3.79 | 4.01 | 4.42 | 4.85 | 5.22 | 5.06 | 4.44 | 4.55 | 3.73 | 3.45 | 3.29 | 3.53 | 3.76 | 4.67 | 4.51 | 4.70 | 4.74 | 4.45 | 4.36 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $14,805,900K ÷ ($4,771,800K – $843,600K)
= 3.77
The working capital turnover of Reliance Steel & Aluminum Co. has shown a declining trend over the past eight quarters, from 5.22 in Q3 2022 to 3.77 in Q4 2023. This indicates that the company is generating $3.77 in revenue for every dollar of working capital invested in its operations in the most recent quarter.
The decreasing trend in working capital turnover suggests that the company may be becoming less efficient in utilizing its working capital to generate sales. A lower working capital turnover could imply that the company is carrying excessive levels of inventory or accounts receivable relative to its sales levels, which may lead to higher holding costs or liquidity issues.
It is crucial for Reliance Steel & Aluminum Co. to closely monitor its working capital turnover and identify the reasons behind the decline to optimize the management of its working capital and improve operational efficiency in the future.
Peer comparison
Dec 31, 2023