RXO Inc. (RXO)
Working capital turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | ||
|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 3,926,000 | 4,070,000 | 4,231,000 | |||
| Total current assets | US$ in thousands | 796,000 | 936,000 | 916,000 | 1,029,000 | 1,029,000 | 1,225,000 |
| Total current liabilities | US$ in thousands | 682,000 | 728,000 | 699,000 | 820,000 | 823,000 | 888,000 |
| Working capital turnover | 34.44 | 19.57 | 19.50 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $3,926,000K ÷ ($796,000K – $682,000K)
= 34.44
To analyze the working capital turnover of RXO Inc., we will use the formula:
Working Capital Turnover = Revenue / Average Working Capital
Using the provided data, we calculate the working capital turnover for each period as follows:
- December 31, 2023: Working Capital Turnover = Revenue / Average Working Capital
- September 30, 2023: Working Capital Turnover = Revenue / Average Working Capital
- June 30, 2023: Working Capital Turnover = Revenue / Average Working Capital
- March 31, 2023: Working Capital Turnover = Revenue / Average Working Capital
- December 31, 2022: Working Capital Turnover = Revenue / Average Working Capital
- September 30, 2022: Working Capital Turnover = Revenue / Average Working Capital
The fluctuations in the working capital turnover indicate how effectively the company is using its working capital to generate sales. A higher ratio suggests that the company is efficient in utilizing its working capital to generate revenue. Conversely, a lower ratio may indicate inefficiency in managing working capital.
In the case of RXO Inc., we observe fluctuations in the working capital turnover over the periods provided. In December 2023, the working capital turnover ratio spiked to 34.44, indicating a significant improvement in the efficiency of utilizing working capital compared to the previous periods. In September 2023 and June 2023, the ratios were relatively stable at around 19.57 and 19.50 respectively, suggesting consistent performance in utilizing working capital to generate revenue.
It is important for RXO Inc. to closely monitor its working capital turnover ratio over time to ensure efficient management of working capital in supporting its business operations and growth objectives. Further analysis and comparison with industry benchmarks can provide additional insights into the company's financial performance and operational efficiency.
Peer comparison
Dec 31, 2023