Solventum Corp. (SOLV)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 8,254,000 | 8,197,000 | 8,130,000 | 8,171,000 | 7,281,000 |
| Total current assets | US$ in thousands | 3,249,000 | 2,916,000 | 2,231,000 | 2,189,000 | — |
| Total current liabilities | US$ in thousands | 2,703,000 | 1,771,000 | 1,311,000 | 1,406,000 | — |
| Working capital turnover | 15.12 | 7.16 | 8.84 | 10.44 | — |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $8,254,000K ÷ ($3,249,000K – $2,703,000K)
= 15.12
Solventum Corp.'s working capital turnover indicates the efficiency with which the company utilizes its working capital to generate sales revenue. The trend in the working capital turnover ratio from 2021 to 2024 shows a fluctuating pattern.
On December 31, 2021, the company achieved a working capital turnover ratio of 10.44, which suggests that for each dollar of working capital invested, the company generated $10.44 in sales revenue during that period. This indicates a relatively high level of efficiency in utilizing its working capital.
However, the efficiency decreased in the following years, with the working capital turnover ratios dropping to 8.84 on December 31, 2022, 7.16 on December 31, 2023, and then increasing significantly to 15.12 on December 31, 2024.
The decline in the working capital turnover ratio in 2022 and 2023 may suggest potential inefficiencies or changes in the company's operations affecting its ability to generate sales from working capital.
The significant increase in the ratio in 2024 could indicate improved utilization of working capital or a boost in sales efficiency during that period. Overall, Solventum Corp. should continue to monitor its working capital turnover ratio to ensure optimal utilization of resources to drive sales growth in the future.
Peer comparison
Dec 31, 2024