Williams-Sonoma Inc (WSM)
Working capital turnover
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,711,540 | 7,750,650 | 7,750,650 | 8,674,420 | 8,674,420 |
| Total current assets | US$ in thousands | 2,754,610 | 2,719,800 | 2,719,800 | 2,036,080 | 2,036,080 |
| Total current liabilities | US$ in thousands | 1,911,970 | 1,880,320 | 1,880,320 | 1,636,450 | 1,636,450 |
| Working capital turnover | 9.15 | 9.23 | 9.23 | 21.71 | 21.71 |
January 31, 2025 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,711,540K ÷ ($2,754,610K – $1,911,970K)
= 9.15
Working capital turnover is a crucial financial ratio that measures a company's efficiency in generating sales revenue from its working capital. Williams-Sonoma Inc's working capital turnover has shown a consistent value of 21.71 for the period between January 29, 2023, and January 31, 2023. This indicates that for each dollar of working capital invested, the company generated $21.71 in sales during that period.
However, there was a notable decrease in the working capital turnover ratio to 9.23 for the period ending January 28, 2024, and it remained the same for the subsequent period ending January 31, 2024. This decline suggests that Williams-Sonoma Inc's efficiency in utilizing its working capital to drive sales decreased significantly during that time frame.
Further, the working capital turnover continued to decrease slightly to 9.15 for the period ending January 31, 2025, indicating a sustained lower efficiency in generating sales from its working capital compared to the earlier period.
Overall, the fluctuation in Williams-Sonoma Inc's working capital turnover ratio highlights a potential inefficiency in managing working capital effectively to generate sales revenue, which can impact the company's overall financial performance and liquidity.