Textron Inc (TXT)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 13,702,000 | 13,683,000 | 12,869,000 | 12,382,000 | 11,651,000 |
| Total current assets | US$ in thousands | 4,126,000 | 3,974,000 | 5,513,000 | 3,663,000 | 5,659,000 |
| Total current liabilities | US$ in thousands | 4,394,000 | 4,378,000 | 3,670,000 | 3,136,000 | 3,270,000 |
| Working capital turnover | — | — | 6.98 | 23.50 | 4.88 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $13,702,000K ÷ ($4,126,000K – $4,394,000K)
= —
The working capital turnover ratio measures how well a company utilizes its working capital to generate sales revenue. A higher ratio indicates efficient management of working capital.
Looking at Textron Inc's working capital turnover from 2020 to 2024, we observe significant fluctuations. In 2020, the ratio stood at 4.88, suggesting that for every dollar of working capital, the company generated $4.88 in sales.
The ratio saw a substantial increase to 23.50 in 2021, indicating a significant improvement in efficiency, possibly due to better working capital management or increased sales relative to working capital levels. However, this spike may also signal underlying issues such as inventory management or aggressive sales practices.
In 2022, the ratio decreased to 6.98, still above the 2020 level but lower than the peak in 2021. This could signal a return to a more sustainable working capital turnover rate, with the company maintaining efficiency while not overly relying on working capital.
Unfortunately, data for 2023 and 2024 is missing. The absence of values for these years makes it challenging to assess the company's recent performance in terms of working capital turnover.
Overall, Textron Inc's working capital turnover ratio demonstrates variability over the years, showcasing the importance of managing working capital effectively to support the company's sales activities. Monitoring this ratio over time can provide insights into the company's operational efficiency and financial health.
Peer comparison
Dec 31, 2024