United Parcel Service Inc (UPS)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 91,070,000 | 90,958,000 | 100,338,000 | 97,287,000 | 84,628,000 |
| Total current assets | US$ in thousands | 19,310,000 | 19,413,000 | 22,217,000 | 24,934,000 | 20,300,000 |
| Total current liabilities | US$ in thousands | 16,441,000 | 17,676,000 | 18,140,000 | 17,569,000 | 17,016,000 |
| Working capital turnover | 31.74 | 52.36 | 24.61 | 13.21 | 25.77 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $91,070,000K ÷ ($19,310,000K – $16,441,000K)
= 31.74
United Parcel Service Inc's working capital turnover has shown fluctuations over the years based on the provided data. As of December 31, 2020, the working capital turnover ratio was 25.77, indicating that the company generated $25.77 in revenue for every dollar of working capital invested.
However, by December 31, 2021, the ratio decreased to 13.21, suggesting a decrease in efficiency in utilizing working capital to generate sales. The ratio improved in the following years, reaching 24.61 by December 31, 2022, 52.36 by December 31, 2023, and 31.74 by December 31, 2024.
The significant increase in the working capital turnover ratio in 2023 reflects a notable improvement in efficiency, indicating that the company was able to generate $52.36 in revenue for every dollar of working capital. This could be attributed to effective management of working capital components such as inventory, accounts receivable, and accounts payable.
Overall, the fluctuation in the working capital turnover ratio over the years suggests varying levels of operational efficiency in managing working capital. It is essential for United Parcel Service Inc to closely monitor and optimize its working capital management practices to ensure optimal utilization of resources and maximize profitability.