Xpel Inc (XPEL)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 395,362 | 367,671 | 354,472 | 335,716 | 322,032 | 313,502 | 292,841 | 278,485 | 258,608 | 237,501 | 215,221 | 182,193 | 158,356 | 149,325 | 138,728 | 133,070 | |||
| Total current assets | US$ in thousands | 146,454 | 138,038 | 125,655 | 120,312 | 106,821 | 104,642 | 107,566 | 104,011 | 79,028 | 65,994 | 50,295 | 72,549 | 62,777 | 57,957 | 49,821 | 43,257 | 36,281 | 33,081 | 29,641 |
| Total current liabilities | US$ in thousands | 36,472 | 46,545 | 35,396 | 27,630 | 27,402 | 31,815 | 40,419 | 47,098 | 36,268 | 34,987 | 25,000 | 26,109 | 21,200 | 20,900 | 19,108 | 14,785 | 11,786 | 12,775 | 13,468 |
| Working capital turnover | 3.59 | 4.02 | 3.93 | 3.62 | 4.05 | 4.30 | 4.36 | 4.89 | 6.05 | 7.66 | 8.51 | 3.92 | 3.81 | 4.03 | 4.52 | 4.67 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $395,362K ÷ ($146,454K – $36,472K)
= 3.59
The working capital turnover ratio for XPEL Inc over the past eight quarters has shown a general downward trend, indicating a decrease in efficiency in managing its working capital. The ratio measures the company's ability to generate sales revenue from its working capital, with a higher ratio typically indicating better efficiency.
In Q1 2022, the working capital turnover was the highest at 4.91, suggesting that the company was able to generate nearly 5 times its working capital in revenue during that period. However, this ratio has been gradually declining over the subsequent quarters, reaching 3.60 in Q4 2023.
The decreasing trend in the working capital turnover ratio may suggest inefficiencies in the company's management of its current assets and liabilities to support its sales activities. It could indicate either an increase in working capital levels without corresponding revenue growth or a slowdown in sales relative to the level of working capital.
XPEL Inc should closely monitor and analyze the factors contributing to this decline in working capital turnover to identify opportunities for improvement in its working capital management and operational efficiency.