Waters Corporation (WAT)

Working capital turnover

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Revenue US$ in thousands 2,842,300 2,892,160 2,735,940 2,309,300 2,348,910
Total current assets US$ in thousands 1,752,870 1,763,900 1,628,940 1,401,030 1,312,490
Total current liabilities US$ in thousands 789,580 785,737 680,508 804,983 591,334
Working capital turnover 2.95 2.96 2.88 3.87 3.26

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,842,300K ÷ ($1,752,870K – $789,580K)
= 2.95

Waters Corp.'s working capital turnover ratio has shown variability over the past five years, ranging from 2.94 to 3.97. The ratio measures the efficiency of the company in utilizing its working capital to generate revenue.

In 2023, the working capital turnover ratio improved to 3.07 from 3.04 in 2022 but remained below the peak achieved in 2020 (3.97). This indicates that the company was able to generate $3.07 of revenue for every dollar of working capital invested during 2023.

While a higher ratio is generally preferred as it suggests efficient utilization of working capital, the fluctuations in Waters Corp.'s working capital turnover may reflect changes in the company's operating cycle or management of its current assets and liabilities.

It is essential for Waters Corp. to continue monitoring and managing its working capital effectively to ensure optimal utilization and sustained financial performance in the future.


Peer comparison

Dec 31, 2023