Advanced Drainage Systems Inc (WMS)
Working capital turnover
| Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 2,904,245 | 2,942,324 | 2,914,153 | 2,911,763 | 2,874,473 | 2,838,192 | 2,830,992 | 2,934,981 | 3,071,121 | 3,131,749 | 3,191,939 | 3,014,201 | 2,769,315 | 2,534,937 | 2,305,725 | 2,143,441 | 1,982,780 | 1,909,739 | 1,817,018 | 1,768,736 |
| Total current assets | US$ in thousands | 1,324,780 | 1,245,100 | 1,491,920 | 1,424,300 | 1,299,970 | 1,238,420 | 1,231,920 | 1,168,520 | 1,017,490 | 1,157,370 | 1,347,880 | 1,401,340 | 871,898 | 807,019 | 817,573 | 795,596 | 742,978 | 663,534 | 700,579 | 729,364 |
| Total current liabilities | US$ in thousands | 398,396 | 388,090 | 467,337 | 492,927 | 439,622 | 409,125 | 427,867 | 419,587 | 378,802 | 370,280 | 439,300 | 504,758 | 391,241 | 364,084 | 413,839 | 407,450 | 318,270 | 277,559 | 282,491 | 258,901 |
| Working capital turnover | 3.14 | 3.43 | 2.84 | 3.13 | 3.34 | 3.42 | 3.52 | 3.92 | 4.81 | 3.98 | 3.51 | 3.36 | 5.76 | 5.72 | 5.71 | 5.52 | 4.67 | 4.95 | 4.35 | 3.76 |
March 31, 2025 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,904,245K ÷ ($1,324,780K – $398,396K)
= 3.14
The working capital turnover of Advanced Drainage Systems Inc has shown fluctuations over the reported periods. The working capital turnover ratio measures how efficiently the company is utilizing its working capital to generate revenue. A higher ratio indicates that the company is generating more revenue per dollar of working capital.
From June 30, 2020, to September 30, 2021, the working capital turnover increased steadily from 3.76 to 5.71, indicating improved efficiency in utilizing working capital. However, starting from June 30, 2022, the ratio declined, reaching its lowest point at 2.84 on September 30, 2024, before slightly recovering.
The company should closely monitor its working capital management during periods of declining turnover to ensure efficient use of resources. It may be beneficial for Advanced Drainage Systems Inc to analyze the factors contributing to the fluctuations in the working capital turnover ratio and implement strategies to maintain or improve efficiency in utilizing working capital.