The Wendy’s Co (WEN)
Working capital turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 2,181,578 | 2,177,437 | 2,159,451 | 2,135,669 | 2,095,505 | 2,032,198 | 1,969,884 | 1,925,438 | 1,896,998 | 1,898,112 | 1,880,099 | 1,789,068 | 1,733,825 | 1,686,699 | 1,672,337 | 1,705,379 | 1,709,002 | 1,679,631 | 1,642,301 | 1,617,955 |
| Total current assets | US$ in thousands | 837,653 | 926,052 | 967,446 | 1,003,400 | 1,058,280 | 1,094,650 | 1,043,920 | 1,079,830 | 592,849 | 843,485 | 839,526 | 641,497 | 687,623 | 607,736 | 697,908 | 591,883 | 554,047 | 673,774 | 672,383 | 663,764 |
| Total current liabilities | US$ in thousands | 381,930 | 405,200 | 389,921 | 399,531 | 387,999 | 418,416 | 398,823 | 407,649 | 426,925 | 407,185 | 372,786 | 396,519 | 413,308 | 360,250 | 492,635 | 430,759 | 349,698 | 337,446 | 341,275 | 323,637 |
| Working capital turnover | 4.79 | 4.18 | 3.74 | 3.54 | 3.13 | 3.01 | 3.05 | 2.86 | 11.43 | 4.35 | 4.03 | 7.30 | 6.32 | 6.82 | 8.15 | 10.58 | 8.36 | 4.99 | 4.96 | 4.76 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,181,578K ÷ ($837,653K – $381,930K)
= 4.79
The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher ratio indicates that the company is effectively managing its working capital to support its operations and generate sales.
Based on the data provided for Wendy's Co, we can observe an increasing trend in the working capital turnover ratio over the past eight quarters. In Q4 2023, Wendy's Co achieved a working capital turnover ratio of 4.79, indicating that the company generated 4.79 times its sales revenue with the working capital available during that quarter.
The consistent improvement in the working capital turnover ratio suggests that Wendy's Co has been able to optimize its working capital management, leading to increased efficiency in utilizing its resources to drive sales growth. This improvement could be attributed to better inventory management, accounts receivable collection, and overall operational effectiveness.
Overall, the upward trend in the working capital turnover ratio reflects positively on Wendy's Co's ability to efficiently convert its working capital into sales revenue, which is a key indicator of the company's financial health and operational efficiency.
Peer comparison
Dec 31, 2023