Transdigm Group Incorporated (TDG)
Working capital turnover
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,940,000 | 6,585,000 | 5,429,000 | 4,798,000 | 5,103,000 |
| Total current assets | US$ in thousands | 10,029,000 | 6,738,000 | 5,649,000 | 7,030,000 | 6,960,000 |
| Total current liabilities | US$ in thousands | 6,339,000 | 1,579,000 | 1,426,000 | 1,663,000 | 1,616,000 |
| Working capital turnover | 2.15 | 1.28 | 1.29 | 0.89 | 0.95 |
September 30, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,940,000K ÷ ($10,029,000K – $6,339,000K)
= 2.15
The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher ratio indicates better efficiency in using its working capital to generate revenue.
Transdigm Group Incorporated's working capital turnover has shown a positive trend over the past five years. In 2024, the company's working capital turnover ratio was 2.15, indicating a significant improvement compared to the previous years. This suggests that Transdigm has been more effective in utilizing its working capital to generate sales revenue.
In 2023 and 2022, the working capital turnover ratios were relatively stable at 1.28 and 1.29, respectively, showing consistent efficiency in working capital management. The ratio increased slightly from 2021 to 2022, indicating a slight improvement in utilizing working capital to generate revenue.
However, in 2021 and 2020, the working capital turnover ratios were lower at 0.89 and 0.95, respectively. This suggests that the company was less efficient in utilizing its working capital to generate sales revenue during those years.
Overall, the increasing trend in Transdigm Group's working capital turnover ratio reflects improving efficiency in managing its working capital to drive sales revenue, which is a positive indicator for the company's financial performance and operational effectiveness.