Trane Technologies plc (TT)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 17,423,000 | 15,750,300 | 13,892,000 | 12,196,000 | 16,343,600 |
| Total current assets | US$ in thousands | 6,869,900 | 6,379,200 | 6,470,900 | 6,905,600 | 9,293,800 |
| Total current liabilities | US$ in thousands | 6,053,500 | 5,686,800 | 4,752,400 | 4,338,900 | 5,238,600 |
| Working capital turnover | 21.34 | 22.75 | 8.08 | 4.75 | 4.03 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $17,423,000K ÷ ($6,869,900K – $6,053,500K)
= 21.34
Trane Technologies plc's working capital turnover has exhibited fluctuations over the past five years. The metric was at its highest in 2022 at 23.10, indicating that the company generated $23.10 in revenue for every dollar of working capital invested in the business during that year. This implies efficient utilization of working capital to generate sales.
In contrast, the working capital turnover was significantly lower in 2020 and 2021 at 4.85 and 8.23, respectively. This suggests that the company may have faced challenges in effectively converting its working capital into sales during those years.
Overall, the trend in Trane Technologies plc's working capital turnover indicates variability in the company's ability to efficiently manage its working capital resources over the years, influencing its revenue generation efficiency.