Timken Company (TKR)
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 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 4,573,000 | 4,590,600 | 4,606,500 | 4,696,500 | 4,769,000 | 4,759,800 | 4,753,500 | 4,634,900 | 4,496,700 | 4,422,000 | 4,322,900 | 4,232,100 | 4,132,900 | 4,017,300 | 3,874,600 | 3,615,200 | 3,513,200 | 3,517,700 | 3,537,100 | 3,733,600 |
| Total current assets | US$ in thousands | 2,516,900 | 2,731,900 | 2,773,100 | 2,700,600 | 2,634,900 | 2,606,900 | 2,710,800 | 2,592,300 | 2,504,000 | 2,453,500 | 2,480,400 | 2,548,300 | 2,213,500 | 2,195,400 | 2,195,000 | 2,143,600 | 2,000,300 | 1,964,500 | 2,006,900 | 2,092,200 |
| Total current liabilities | US$ in thousands | 820,500 | 910,300 | 940,700 | 1,442,700 | 1,471,300 | 1,503,900 | 1,022,400 | 940,000 | 1,012,400 | 1,209,000 | 920,500 | 866,200 | 896,600 | 846,000 | 857,300 | 916,800 | 848,000 | 740,400 | 664,800 | 769,800 |
| Working capital turnover | 2.70 | 2.52 | 2.51 | 3.73 | 4.10 | 4.32 | 2.82 | 2.81 | 3.01 | 3.55 | 2.77 | 2.52 | 3.14 | 2.98 | 2.90 | 2.95 | 3.05 | 2.87 | 2.64 | 2.82 |
December 31, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,573,000K ÷ ($2,516,900K – $820,500K)
= 2.70
Working capital turnover is a financial ratio that measures how efficiently a company is using its working capital to generate revenue. By analyzing Timken Company's working capital turnover over the past few years, we can gain insights into its operational efficiency and liquidity management.
Timken Company's working capital turnover has shown some fluctuations over the years, ranging from a low of 2.51 to a high of 4.32. A higher working capital turnover ratio indicates that the company is better at utilizing its working capital to generate sales revenue. A consistent or increasing trend in this ratio typically signifies effective management of working capital resources and efficient operations.
From the data provided, we observe that Timken Company's working capital turnover ratio experienced an increase from 2.82 on March 31, 2020, to a peak of 4.32 on September 30, 2023, before declining to 2.70 on December 31, 2024. This suggests that the company was able to improve its efficiency in utilizing working capital to drive sales during the period, reaching a peak in efficiency in the third quarter of 2023.
It is important to note that a sudden decline in the working capital turnover ratio may indicate issues with inventory management, inefficient collection of receivables, or excess working capital tied up in the business. Further analysis of the company's financial statements and operational activities would be necessary to understand the underlying reasons for the fluctuations in the working capital turnover ratio.
Overall, Timken Company's working capital turnover ratio provides valuable information about the company's ability to efficiently convert its working capital into revenue. Monitoring this ratio over time can help stakeholders assess the company's liquidity position and operational effectiveness.
Peer comparison
Dec 31, 2024