Wingstop Inc (WING)

Working capital turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Revenue (ttm) US$ in thousands 625,807 591,043 545,649 497,123 460,055 437,865 413,433 390,037 357,521 324,682 297,794 288,017 282,502 273,756 271,960 264,065 248,811 238,715 224,602 207,059
Total current assets US$ in thousands 395,618 166,237 162,788 170,876 144,344 132,843 238,183 249,402 226,672 223,091 209,479 324,233 70,149 88,802 84,708 81,144 72,620 82,285 67,456 52,848
Total current liabilities US$ in thousands 87,443 118,891 84,536 78,829 71,004 67,332 58,788 79,311 62,412 60,655 52,665 171,368 39,681 59,309 51,645 48,178 50,473 57,420 47,579 45,291
Working capital turnover 2.03 12.48 6.97 5.40 6.27 6.68 2.30 2.29 2.18 2.00 1.90 1.88 9.27 9.28 8.23 8.01 11.23 9.60 11.30 27.40

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $625,807K ÷ ($395,618K – $87,443K)
= 2.03

Wingstop Inc's working capital turnover has displayed fluctuations over the periods examined. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. A higher ratio indicates that the company is generating more sales per dollar of working capital.

In March 2020, Wingstop Inc had a high working capital turnover of 27.40, indicating efficient utilization of working capital to generate sales. However, this ratio decreased to 11.30 in June 2020 and further declined to 8.01 by March 2021. The company's efficiency in using working capital improved slightly to 9.28 by September 2021 but remained relatively low in comparison to the initial period.

By the end of December 2023, Wingstop Inc's working capital turnover ratio had increased to 6.27, showing a modest improvement in efficiency. However, the ratio dropped to 5.40 in March 2024 before significantly increasing to 12.48 by September 2024. This substantial increase suggests that the company was able to generate a higher level of sales relative to its working capital.

Overall, Wingstop Inc's working capital turnover ratio fluctuated throughout the observed periods, indicating varying levels of efficiency in utilizing working capital to drive sales. The company should continue to monitor and improve this ratio to optimize its working capital management and enhance operational performance.