Stepan Company (SCL)
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 | 2,306,119 | 2,409,124 | 2,565,319 | 2,735,064 | 2,759,510 | 2,746,863 | 2,632,121 | 2,477,612 | 2,339,459 | 2,223,132 | 2,085,032 | 1,950,387 | 1,863,537 | 1,821,473 | 1,808,473 | 1,819,863 | 1,859,078 | 1,880,747 | 1,936,514 | 2,504,002 |
| Total current assets | US$ in thousands | 851,883 | 849,436 | 938,722 | 1,006,520 | 1,044,800 | 1,072,750 | 1,087,370 | 1,081,870 | 913,368 | 839,213 | 815,855 | 797,653 | 905,651 | 833,036 | 796,376 | 768,544 | 818,789 | 798,028 | 806,807 | 808,136 |
| Total current liabilities | US$ in thousands | 607,870 | 582,077 | 642,037 | 662,744 | 670,649 | 603,245 | 638,228 | 611,062 | 500,476 | 491,065 | 464,501 | 464,089 | 416,554 | 361,166 | 319,172 | 310,158 | 339,114 | 292,963 | 299,466 | 295,448 |
| Working capital turnover | 9.45 | 9.01 | 8.65 | 7.96 | 7.38 | 5.85 | 5.86 | 5.26 | 5.67 | 6.39 | 5.93 | 5.85 | 3.81 | 3.86 | 3.79 | 3.97 | 3.88 | 3.72 | 3.82 | 4.88 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,306,119K ÷ ($851,883K – $607,870K)
= 9.45
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales. A higher ratio indicates that the company is efficiently using its current assets to support revenue generation.
Analyzing the data provided for Stepan Co., we observe a consistent improvement in the working capital turnover ratio over the past eight quarters. The ratio has increased steadily from 5.27 in Q1 2022 to 9.53 in Q4 2023.
This improvement suggests that Stepan Co. has been able to generate more revenue relative to its working capital over time. This could be attributed to effective management of its current assets and liabilities, leading to improved liquidity and operational efficiency.
The upward trend in working capital turnover indicates that the company is becoming more efficient in utilizing its working capital, potentially resulting in enhanced profitability and financial performance. It also signifies that Stepan Co. is effectively managing its working capital cycle, which is crucial for sustaining business operations and growth over time.
Peer comparison
Dec 31, 2023