Textron Inc (TXT)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 13,683,000 | 12,869,000 | 12,382,000 | 11,651,000 | 13,630,000 |
| Total current assets | US$ in thousands | 3,974,000 | 5,513,000 | 3,663,000 | 5,659,000 | 4,245,000 |
| Total current liabilities | US$ in thousands | 4,378,000 | 3,670,000 | 3,136,000 | 3,270,000 | 48,000 |
| Working capital turnover | — | 6.98 | 23.50 | 4.88 | 3.25 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $13,683,000K ÷ ($3,974,000K – $4,378,000K)
= —
The working capital turnover ratio for Textron Inc has shown fluctuating trends over the past five years, ranging from 3.25 to 23.50. A higher working capital turnover ratio indicates that the company is effectively utilizing its working capital to generate sales revenue.
In 2022, the ratio significantly increased to 6.98 from 4.88 in 2020, reflecting improved efficiency in converting working capital into sales. This positive trend suggests that Textron Inc has managed to enhance its operational efficiency and streamline its working capital management.
However, the extremely high ratio of 23.50 in 2021 raises a potential red flag as it may indicate an excessive reduction in working capital, which could impact the company's ability to cover its short-term obligations or manage day-to-day operations effectively.
Overall, while a higher working capital turnover ratio is generally favorable, the company should ensure a balance between operational efficiency and maintaining adequate working capital levels to support its business activities.
Peer comparison
Dec 31, 2023