Sterling Construction Company Inc (STRL)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,115,760 | 1,972,230 | 1,769,440 | 1,414,370 | 1,226,740 |
| Total current assets | US$ in thousands | 1,021,880 | 847,979 | 597,254 | 434,691 | 361,543 |
| Total current liabilities | US$ in thousands | 741,958 | 678,168 | 446,611 | 351,760 | 321,884 |
| Working capital turnover | 7.56 | 11.61 | 11.75 | 17.05 | 30.93 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,115,760K ÷ ($1,021,880K – $741,958K)
= 7.56
The working capital turnover ratio for Sterling Construction Company Inc. demonstrates a declining trend over the observed period from December 31, 2020, to December 31, 2024. Specifically, the ratio decreased from 30.93 in 2020 to 17.05 in 2021, indicating that the company generated less revenue per dollar of working capital in that year. The downward trajectory continued in 2022 with a ratio of 11.75 and remained relatively steady through 2023 at 11.61. By the end of 2024, the ratio declined further to 7.56, reflecting a substantial reduction in the efficiency with which the company utilizes its working capital to generate sales.
This decreasing trend suggests that Sterling Construction has become less efficient in leveraging its working capital to support its revenue generation over time. Potential factors could include increased working capital levels without a proportional increase in sales, changes in operational efficiency, or shifts in the company's business structure or strategy. The notable decline between 2020 and 2024 indicates ongoing challenges in maintaining previous levels of operational efficiency related to working capital management.
Peer comparison
Dec 31, 2024