Snap-On Inc (SNA)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 5,108,300 | 4,842,500 | 4,601,700 | 3,942,200 | 4,067,700 |
| Total current assets | US$ in thousands | 3,652,000 | 3,368,900 | 3,053,400 | 3,083,000 | 2,380,500 |
| Total current liabilities | US$ in thousands | 941,600 | 971,600 | 982,200 | 1,164,900 | 947,600 |
| Working capital turnover | 1.88 | 2.02 | 2.22 | 2.06 | 2.84 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $5,108,300K ÷ ($3,652,000K – $941,600K)
= 1.88
Snap-On Inc's working capital turnover has been fluctuating over the past five years. From 2019 to 2020, there was a significant increase in the working capital turnover ratio from 2.84 to 2.06, indicating a decrease in efficiency in utilizing working capital to generate sales. However, this trend reversed in 2021, with the ratio improving to 2.22, though it decreased again to 2.02 in 2022 and further to 1.88 in 2023.
A lower working capital turnover ratio indicates that the company is less efficient in managing its working capital to support its revenue generation. This could be due to factors such as inefficient inventory management, extended accounts receivable collection periods, or excessive levels of working capital tied up in operations.
It would be important for Snap-On Inc to closely monitor its working capital turnover ratio and identify areas for improvement to ensure optimal utilization of working capital and enhance overall operational efficiency.
Peer comparison
Dec 31, 2023