Tractor Supply Company (TSCO)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 14,883,200 | 14,555,700 | 14,204,700 | 12,731,100 | 10,620,400 |
| Total current assets | US$ in thousands | 3,309,920 | 3,263,940 | 3,157,780 | 3,250,440 | 3,258,680 |
| Total current liabilities | US$ in thousands | 2,319,190 | 2,177,080 | 2,376,210 | 2,064,840 | 1,743,800 |
| Working capital turnover | 15.02 | 13.39 | 18.17 | 10.74 | 7.01 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $14,883,200K ÷ ($3,309,920K – $2,319,190K)
= 15.02
Tractor Supply Company's working capital turnover has shown a consistent upward trend over the past five years, reflecting an improvement in its efficiency in managing its working capital. The ratio increased from 7.01 in December 2020 to 15.02 in December 2024, indicating that the company is generating sales revenue at a faster pace relative to its investment in working capital.
This upward trend suggests that Tractor Supply Company has been able to optimize its working capital management, possibly by effectively managing its inventory, receivables, and payables. A higher working capital turnover ratio typically signifies that the company is utilizing its current assets efficiently to support its operations and sales activities.
The significant increase in the working capital turnover ratio from 2022 to 2024 implies that Tractor Supply Company has been able to streamline its working capital cycle, leading to a more effective use of its resources. This improvement can enhance the company's liquidity position and overall financial performance by reducing the amount of capital tied up in current assets relative to its sales.
Overall, Tractor Supply Company's rising working capital turnover ratio indicates a positive trend in the company's operational efficiency and financial management, which can contribute to its sustainable growth and profitability in the future.
Peer comparison
Dec 31, 2024