The Wendy’s Co (WEN)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,246,490 | 2,181,580 | 2,095,500 | 1,897,000 | 1,733,820 |
| Total current assets | US$ in thousands | 736,140 | 837,653 | 1,058,280 | 592,849 | 687,623 |
| Total current liabilities | US$ in thousands | 397,631 | 381,930 | 387,999 | 426,925 | 413,308 |
| Working capital turnover | 6.64 | 4.79 | 3.13 | 11.43 | 6.32 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,246,490K ÷ ($736,140K – $397,631K)
= 6.64
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue.
Based on the data provided for The Wendy’s Co, we observe fluctuations in the working capital turnover ratio over the years. In December 31, 2020, the ratio stood at 6.32, indicating that the company generated $6.32 in revenue for every dollar of working capital invested.
There was a significant increase in the ratio in December 31, 2021, to 11.43, signaling a more efficient use of working capital to generate sales.
However, in December 31, 2022, the working capital turnover ratio dropped to 3.13, suggesting a decline in efficiency in utilizing working capital to drive revenue. This decrease may be attributed to various factors such as changes in operating cycle and management of current assets and liabilities.
The ratio showed some recovery in December 31, 2023, with a value of 4.79, indicating a better utilization of working capital compared to the previous year.
By December 31, 2024, the working capital turnover ratio increased to 6.64, indicating an improvement in efficiency in converting working capital into sales.
Overall, fluctuations in The Wendy’s Co's working capital turnover highlight the company's changing ability to optimize its working capital to drive revenue generation over the analyzed period.
Peer comparison
Dec 31, 2024