Shenandoah Telecommunications Co (SHEN)

Working capital turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Revenue US$ in thousands 297,401 285,771 253,739 229,875 612,538
Total current assets US$ in thousands 176,071 128,562 166,367 1,406,610 241,853
Total current liabilities US$ in thousands 98,355 96,421 67,290 1,208,060 153,577
Working capital turnover 3.83 8.89 2.56 1.16 6.94

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $297,401K ÷ ($176,071K – $98,355K)
= 3.83

The working capital turnover ratio for Shenandoah Telecommunications Co. has varied over the past five years. In 2023, the ratio was 3.70, indicating that the company generated $3.70 in net sales revenue for each dollar of working capital. This represents a decrease from the previous year's ratio of 8.32, suggesting a decline in the efficiency of utilizing working capital to generate sales.

Furthermore, in 2023, the working capital turnover ratio was higher than in 2021 and 2020 but lower than in 2019. This indicates fluctuations in the company's ability to efficiently convert working capital into sales revenue over the years.

Overall, a higher working capital turnover ratio is favorable as it suggests that the company is effectively managing its working capital resources to drive sales. However, the decreasing trend from 2022 to 2023 warrants further scrutiny to identify the underlying factors influencing the efficiency of working capital utilization in generating revenue.