Trane Technologies plc (TT)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 19,814,100 | 17,423,000 | 15,750,300 | 13,892,000 | 12,196,000 |
| Total current assets | US$ in thousands | 7,337,800 | 6,869,900 | 6,379,200 | 6,470,900 | 6,905,600 |
| Total current liabilities | US$ in thousands | 6,068,900 | 6,053,500 | 5,686,800 | 4,752,400 | 4,338,900 |
| Working capital turnover | 15.62 | 21.34 | 22.75 | 8.08 | 4.75 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $19,814,100K ÷ ($7,337,800K – $6,068,900K)
= 15.62
Trane Technologies plc's working capital turnover has shown a steady increase over the years, starting at 4.75 in December 31, 2020, and reaching 15.62 by December 31, 2024. This trend indicates that the company has been effectively utilizing its working capital to generate sales revenue.
The significant rise in the working capital turnover ratio from 2020 to 2022 suggests a more efficient management of current assets and liabilities to support operational activities. However, there was a slight decrease in the ratio from 2023 to 2024, indicating a possible change in the company's working capital management strategy during that period.
Overall, the upward trend in the working capital turnover ratio for Trane Technologies plc demonstrates an improvement in the efficiency of its working capital utilization, which is a positive indication of the company's financial health and operational performance.