Standard Motor Products Inc (SMP)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,463,850 | 1,358,270 | 1,371,820 | 1,298,820 | 1,128,590 |
| Total current assets | US$ in thousands | 921,924 | 744,223 | 762,439 | 711,205 | 598,536 |
| Total current liabilities | US$ in thousands | 436,472 | 304,263 | 323,131 | 476,369 | 302,602 |
| Working capital turnover | 3.02 | 3.09 | 3.12 | 5.53 | 3.81 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,463,850K ÷ ($921,924K – $436,472K)
= 3.02
Standard Motor Products Inc's working capital turnover has shown fluctuations over the past five years. In 2020, the working capital turnover ratio was 3.81, indicating that the company generated $3.81 in revenue for every dollar of working capital invested during that period.
There was a significant improvement in 2021, with the ratio increasing to 5.53, suggesting that the company efficiently utilized its working capital to generate revenue. However, in 2022, the ratio decreased to 3.12, indicating a potential decline in the efficiency of working capital management.
The trend continued in 2023 and 2024, with the working capital turnover ratios dropping to 3.09 and 3.02, respectively. These declining ratios may signal challenges in converting working capital into revenue effectively. It's important for the company to monitor and potentially improve its working capital management practices to enhance efficiency and profitability in the future.
Peer comparison
Dec 31, 2024