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.