Watsco Inc (WSO)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 7,618,320 | 7,283,770 | 7,274,340 | 6,280,190 | 5,054,930 |
| Total current assets | US$ in thousands | 3,079,980 | 2,391,930 | 2,298,740 | 1,961,400 | 1,497,020 |
| Total current liabilities | US$ in thousands | 983,901 | 712,012 | 906,522 | 726,722 | 499,715 |
| Working capital turnover | 3.63 | 4.34 | 5.23 | 5.09 | 5.07 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,618,320K ÷ ($3,079,980K – $983,901K)
= 3.63
The working capital turnover ratio for Watsco Inc has shown a generally positive trend from 2020 to 2022, increasing from 5.07 to 5.23. This indicates that the company is generating more revenue per dollar of working capital invested during this period. However, there was a notable decrease in the ratio in 2023 to 4.34, which may suggest a decrease in efficiency in utilizing working capital to generate sales. This trend continued in 2024, with the ratio falling further to 3.63, reflecting a potential concern regarding the management of working capital in generating sales revenue. Overall, it is important for Watsco Inc to closely monitor and manage its working capital turnover to ensure efficient use of resources and maximize profitability.