Standard Motor Products Inc (SMP)

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 2,701,423 2,718,401 2,708,286 2,722,422 2,715,865 2,739,824 2,720,702 2,687,356 2,595,396 2,259,260 2,206,048 2,017,497 1,972,331 1,930,845 1,858,027 1,971,543 2,030,255 2,035,973 2,014,034 1,977,475
Total current assets US$ in thousands 744,223 762,413 787,883 803,854 762,439 829,673 842,861 819,415 711,205 710,857 680,669 617,036 598,536 596,274 589,898 584,689 540,557 557,056 605,712 580,357
Total current liabilities US$ in thousands 304,263 373,342 348,489 321,424 323,131 373,864 410,220 578,128 476,369 478,371 447,067 313,424 302,602 303,814 337,606 348,207 300,588 329,660 393,940 345,570
Working capital turnover 6.14 6.99 6.16 5.64 6.18 6.01 6.29 11.14 11.05 9.72 9.44 6.64 6.66 6.60 7.36 8.34 8.46 8.95 9.51 8.42

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,701,423K ÷ ($744,223K – $304,263K)
= 6.14

Standard Motor Products, Inc. has shown varying levels of efficiency in managing its working capital turnover over the past eight quarters. The working capital turnover ratio measures how effectively the company is utilizing its working capital to generate sales revenue.

In Q4 2023, the working capital turnover ratio was 3.09, indicating that the company generated $3.09 in sales for every dollar of working capital invested. This represents a slight decrease from the previous quarter's ratio of 3.54, suggesting a potential decrease in operational efficiency.

Looking further back, the Q2 and Q3 2023 ratios were 3.12 and 3.01, respectively, showing a relatively consistent performance during that period. However, the working capital turnover increased significantly in Q1 2023 to 2.85, which may suggest improved efficiency in managing working capital during that quarter.

Comparing the current ratios to the same period in the previous year, there appears to be some fluctuation. Q4 2022 and Q2 2022 both had a working capital turnover ratio of 3.12, indicating stable performance over those quarters. However, Q3 2022 had a lower ratio of 3.01, which improved in Q2 2022 to 3.15 before significantly increasing to 5.57 in Q1 2022.

Overall, Standard Motor Products, Inc. has experienced fluctuations in its working capital turnover ratio, with some quarters showing better efficiency in utilizing working capital to generate sales revenue compared to others. The company may benefit from further analysis to identify factors contributing to these fluctuations and take appropriate measures to improve working capital management efficiency.