Scotts Miracle-Gro Company (SMG)
Working capital turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 3,553,100 | 3,371,900 | 3,804,700 | 4,835,700 | 4,051,100 |
| Total current assets | US$ in thousands | 980,400 | 1,397,800 | 1,981,900 | 2,024,000 | 1,216,600 |
| Total current liabilities | US$ in thousands | 750,300 | 773,700 | 963,900 | 1,140,400 | 950,400 |
| Working capital turnover | 15.44 | 5.40 | 3.74 | 5.47 | 15.22 |
September 30, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,553,100K ÷ ($980,400K – $750,300K)
= 15.44
The working capital turnover ratio measures the efficiency of Scotts Miracle-Gro Company in utilizing its working capital to generate sales revenue. A higher turnover ratio indicates that the company is effectively using its working capital to support its operations.
Looking at the trend over the past five years, we observe fluctuations in the working capital turnover ratio for Scotts Miracle-Gro Company. The ratio has significantly increased from 5.47 in 2021 to 15.44 in 2024, indicating a substantial improvement in the efficiency of working capital utilization.
The highest ratio in 2024 suggests that the company has been able to generate $15.44 in sales revenue for every $1 of working capital invested. This could be attributed to effective management of inventory, receivables, and payables, leading to a more streamlined operation.
Overall, the upward trend in the working capital turnover ratio for Scotts Miracle-Gro Company signifies improved efficiency in utilizing its working capital to support sales growth, which is a positive indicator for the company's financial performance.
Peer comparison
Sep 30, 2024