Solventum Corp. (SOLV)
Working capital turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 8,253,000 | 8,274,000 | 8,246,000 | 8,208,500 | 8,236,000 | 8,146,000 | 8,101,000 | 8,115,500 | 8,130,000 |
| Total current assets | US$ in thousands | 3,249,000 | 3,354,000 | 3,363,000 | 3,359,000 | 2,916,000 | 2,656,000 | 2,718,000 | 61,000 | 2,231,000 |
| Total current liabilities | US$ in thousands | 2,703,000 | 2,904,000 | 2,571,000 | 1,854,000 | 1,771,000 | 1,471,000 | 1,412,000 | 1,382,000 | 1,311,000 |
| Working capital turnover | 15.12 | 18.39 | 10.41 | 5.45 | 7.19 | 6.87 | 6.20 | — | 8.84 |
December 31, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $8,253,000K ÷ ($3,249,000K – $2,703,000K)
= 15.12
Solventum Corp.'s working capital turnover ratio provides insight into how efficiently the company is utilizing its working capital to generate sales revenue. The ratio is calculated by dividing net sales by average working capital.
Looking at the data provided, we can see that Solventum Corp.'s working capital turnover ratio has fluctuated over the reporting periods. The ratio was 8.84 on December 31, 2022, which indicates that for every dollar of working capital, the company generated $8.84 in sales revenue during that period.
However, the ratio was not available ("—") on March 31, 2023. This could be due to various reasons such as seasonal fluctuations or specific business events.
Subsequently, the ratio improved to 6.20 on June 30, 2023, and continued to show variability until reaching its peak of 18.39 on September 30, 2024. This significant increase suggests that Solventum Corp. was able to efficiently utilize its working capital to drive sales during that particular period.
Overall, the trend in Solventum Corp.'s working capital turnover ratio demonstrates varying levels of efficiency in converting working capital into sales revenue. It is essential for the company to closely monitor and manage its working capital turnover to ensure optimal utilization of resources and sustained business performance.
Peer comparison
Dec 31, 2024