West Pharmaceutical Services Inc (WST)
Working capital turnover
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 2,931,600 | 2,918,300 | 2,862,000 | 2,884,600 | 2,888,000 | 2,911,600 | 2,929,000 | 2,882,500 | 2,833,200 | 2,681,100 | 2,521,700 | 2,320,600 | 2,141,400 | 2,030,200 | 1,941,400 | 1,887,900 | 1,839,900 | 1,791,800 | 1,767,400 | 1,745,200 |
| Total current assets | US$ in thousands | 1,936,400 | 1,972,300 | 1,874,200 | 1,937,200 | 1,919,500 | 1,733,600 | 1,771,100 | 1,690,500 | 1,742,000 | 1,598,300 | 1,477,000 | 1,327,000 | 1,373,700 | 1,238,300 | 1,110,600 | 977,500 | 1,058,700 | 1,004,100 | 944,300 | 867,600 |
| Total current liabilities | US$ in thousands | 671,800 | 533,500 | 511,600 | 534,900 | 519,000 | 456,700 | 565,100 | 584,800 | 594,100 | 558,600 | 472,600 | 482,800 | 503,400 | 447,700 | 375,200 | 344,400 | 341,600 | 335,000 | 313,200 | 301,100 |
| Working capital turnover | 2.32 | 2.03 | 2.10 | 2.06 | 2.06 | 2.28 | 2.43 | 2.61 | 2.47 | 2.58 | 2.51 | 2.75 | 2.46 | 2.57 | 2.64 | 2.98 | 2.57 | 2.68 | 2.80 | 3.08 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,931,600K ÷ ($1,936,400K – $671,800K)
= 2.32
The working capital turnover for West Pharmaceutical Services, Inc. has exhibited fluctuations over the past eight quarters, ranging from a low of 2.03 in Q3 2023 to a high of 2.61 in Q1 2022.
A higher working capital turnover ratio generally indicates that the company is efficiently using its working capital to generate sales revenue. This is because a higher ratio suggests that the company is converting its working capital (current assets minus current liabilities) into sales more frequently within a given period.
Conversely, a lower working capital turnover ratio may indicate that the company is not effectively utilizing its working capital to generate revenue. This could be due to excess inventory, inefficient accounts receivable management, or inefficient cash flow management.
In the case of West Pharmaceutical Services, Inc., the working capital turnover has been relatively stable around 2.00-2.61 over the past two years. This suggests that the company has been moderately efficient in managing its working capital to drive sales revenue. However, it would be beneficial for the company to analyze the underlying factors affecting this ratio to identify areas for further improvement and efficiency.
Peer comparison
Dec 31, 2023