Transdigm Group Incorporated (TDG)
Working capital turnover
| Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 7,940,000 | 7,606,000 | 7,304,000 | 6,977,000 | 6,585,000 | 6,243,000 | 5,897,000 | 5,632,000 | 5,429,000 | 5,198,000 | 5,018,000 | 4,885,000 | 4,799,000 | 4,693,000 | 4,497,000 | 4,746,000 | 5,103,000 | 5,471,000 | 5,970,000 | 5,695,000 |
| Total current assets | US$ in thousands | 10,029,000 | 7,061,000 | 8,282,000 | 7,396,000 | 6,738,000 | 6,252,000 | 7,456,000 | 5,929,000 | 5,649,000 | 6,308,000 | 6,564,000 | 6,971,000 | 7,030,000 | 6,723,000 | 6,358,000 | 7,074,000 | 6,960,000 | 6,771,000 | 5,200,000 | 6,652,000 |
| Total current liabilities | US$ in thousands | 6,339,000 | 1,851,000 | 2,235,000 | 1,818,000 | 1,579,000 | 1,533,000 | 2,522,000 | 1,408,000 | 1,426,000 | 1,344,000 | 1,301,000 | 1,378,000 | 1,663,000 | 1,636,000 | 1,580,000 | 1,563,000 | 1,616,000 | 1,651,000 | 1,656,000 | 3,350,000 |
| Working capital turnover | 2.15 | 1.46 | 1.21 | 1.25 | 1.28 | 1.32 | 1.20 | 1.25 | 1.29 | 1.05 | 0.95 | 0.87 | 0.89 | 0.92 | 0.94 | 0.86 | 0.95 | 1.07 | 1.68 | 1.72 |
September 30, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $7,940,000K ÷ ($10,029,000K – $6,339,000K)
= 2.15
The working capital turnover ratio for Transdigm Group Incorporated has shown fluctuations over the past 20 quarters, ranging from 0.86 to 2.15. This ratio indicates the efficiency of the company in utilizing its working capital to generate sales revenue.
A higher working capital turnover ratio generally suggests that the company is effectively managing its working capital, which includes current assets and current liabilities. In the case of Transdigm, the ratio has been above 1 for most quarters, indicating that the company is able to generate sales revenue efficiently relative to its working capital levels.
The trend over the past few quarters shows some variability, with the ratio peaking at 2.15 in the most recent quarter but also experiencing lower levels below 1 in certain periods. This variability could be attributed to changes in the company's operations, sales, or working capital management practices during those periods.
Overall, a working capital turnover ratio above 1 signifies that Transdigm Group Incorporated is effectively utilizing its working capital resources to drive sales, although there may be some room for improvement in maintaining a more consistent level of efficiency over time. Monitoring this ratio in conjunction with other financial metrics can provide valuable insights into the company's liquidity and operational efficiency.