RXO Inc. (RXO)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	4,550,000	3,927,000	4,796,000	4,689,000	3,357,000
Total current assets	US$ in thousands	1,339,000	796,000	1,037,000	1,083,000	862,000
Total current liabilities	US$ in thousands	1,065,000	682,000	839,000	816,000	629,000
Working capital turnover		16.61	34.45	24.22	17.56	14.41

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,550,000K ÷ ($1,339,000K – $1,065,000K)
= 16.61

Based on the provided data, the working capital turnover of RXO Inc. has shown a fluctuating trend over the past five years. The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue.

In December 2020, RXO Inc. had a working capital turnover of 14.41, indicating that the company generated $14.41 in sales for every dollar of working capital invested. This ratio increased significantly to 17.56 by December 2021, suggesting an improvement in the efficiency of working capital utilization.

By December 2022, the working capital turnover ratio further increased to 24.22, reaching its peak in the analyzed period. This substantial rise indicates that RXO Inc. was able to generate $24.22 in sales for each dollar of working capital, demonstrating a significant improvement in operational efficiency.

In December 2023, the working capital turnover ratio continued to increase significantly to 34.45, reflecting a robust performance in terms of working capital management and sales generation. However, the ratio declined in December 2024 to 16.61, which could indicate a potential decrease in the company's efficiency in utilizing working capital compared to the previous year.

Overall, the working capital turnover ratio of RXO Inc. has shown varying levels of efficiency in leveraging working capital to drive sales over the five-year period. It is essential for the company to continuously monitor and optimize its working capital management to ensure sustainable growth and profitability in the long term.