Tetra Tech Inc (TTEK)
Working capital turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,470,860 | 3,490,830 | 3,200,980 | 2,991,130 | 3,107,350 |
| Total current assets | US$ in thousands | 1,356,020 | 1,158,220 | 1,065,950 | 999,785 | 1,079,790 |
| Total current liabilities | US$ in thousands | 1,208,140 | 916,017 | 848,483 | 793,456 | 769,954 |
| Working capital turnover | 30.23 | 14.41 | 14.72 | 14.50 | 10.03 |
September 30, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,470,860K ÷ ($1,356,020K – $1,208,140K)
= 30.23
The working capital turnover ratio measures how efficiently a company is using its working capital to generate revenue. Tetra Tech Inc's working capital turnover has shown an increasing trend over the past five years, from 10.03 in 2019 to 30.23 in 2023. This indicates that the company has been more effective at utilizing its working capital to generate sales in recent years.
A higher working capital turnover ratio suggests that the company is managing its working capital more efficiently, which can be a positive sign of effective operational management. It indicates that Tetra Tech Inc is able to convert its working capital into revenue at a faster rate.
The significant increase in the working capital turnover ratio from 2022 to 2023 (from 14.41 to 30.23) may be due to improvements in the company's cash management, inventory control, and accounts receivable collection processes. Overall, the trend of increasing working capital turnover is a positive indicator of Tetra Tech Inc's operational efficiency and effective capital utilization.
Peer comparison
Sep 30, 2023