Watsco Inc (WSO)
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 | 7,618,320 | 7,467,560 | 7,434,360 | 7,298,110 | 7,283,760 | 7,261,780 | 7,170,740 | 7,301,420 | 7,274,350 | 7,204,990 | 6,951,760 | 6,667,640 | 6,280,190 | 5,923,050 | 5,677,150 | 5,182,890 | 5,054,930 | 4,972,530 | 4,830,780 | 4,847,250 |
| Total current assets | US$ in thousands | 3,079,980 | 3,132,990 | 3,034,400 | 2,998,370 | 2,391,930 | 2,730,570 | 2,882,570 | 2,597,820 | 2,298,740 | 2,409,880 | 2,623,930 | 2,320,130 | 1,961,400 | 1,980,860 | 2,022,060 | 1,695,360 | 1,497,020 | 1,644,120 | 1,631,470 | 1,590,380 |
| Total current liabilities | US$ in thousands | 983,901 | 933,149 | 945,167 | 1,026,130 | 712,012 | 887,628 | 955,999 | 953,083 | 906,522 | 939,522 | 1,061,340 | 836,839 | 726,722 | 796,693 | 815,264 | 630,820 | 499,715 | 609,498 | 638,858 | 520,474 |
| Working capital turnover | 3.63 | 3.39 | 3.56 | 3.70 | 4.34 | 3.94 | 3.72 | 4.44 | 5.23 | 4.90 | 4.45 | 4.50 | 5.09 | 5.00 | 4.70 | 4.87 | 5.07 | 4.81 | 4.87 | 4.53 |
December 31, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $7,618,320K ÷ ($3,079,980K – $983,901K)
= 3.63
The working capital turnover ratio of Watsco Inc has exhibited fluctuations over the reporting periods provided. The ratio measures the efficiency of a company in utilizing its working capital to generate sales revenue.
From March 31, 2020, to December 31, 2021, the working capital turnover ratio ranged between 4.53 and 5.09, indicating that the company efficiently turned over its working capital during this period. However, there is a slight decrease in the ratio during the first half of 2022, reaching a low of 4.45 on June 30, 2022.
The ratio subsequently increased to 5.23 by December 31, 2022, suggesting an improvement in the efficiency of working capital utilization. However, from March 31, 2023, to December 31, 2024, there was a declining trend in the ratio, dropping to as low as 3.39 on September 30, 2024.
Overall, the working capital turnover ratio of Watsco Inc has shown variability, with periods of both efficiency and inefficiency in converting working capital into sales. This indicates fluctuations in the company's operational efficiency and effectiveness in managing its working capital over the reported periods.