Adobe Systems Incorporated (ADBE)
Working capital turnover
| Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | Nov 29, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 19,409,000 | 17,606,000 | 15,785,000 | 12,868,000 | 11,171,000 |
| Total current assets | US$ in thousands | 11,084,000 | 8,996,000 | 8,669,000 | 8,146,000 | 6,495,000 |
| Total current liabilities | US$ in thousands | 8,251,000 | 8,128,000 | 6,932,000 | 5,512,000 | 8,191,000 |
| Working capital turnover | 6.85 | 20.28 | 9.09 | 4.89 | — |
December 1, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $19,409,000K ÷ ($11,084,000K – $8,251,000K)
= 6.85
The working capital turnover ratio measures how effectively a company utilizes its working capital to generate revenue. It is calculated by dividing net sales by average working capital.
Based on the given data, Adobe Inc's working capital turnover has fluctuated over the past five years. In 2023, the working capital turnover was 6.85, indicating that the company generated $6.85 in revenue for every $1 of working capital. The significant decrease from the previous year suggests a less efficient utilization of working capital in generating sales.
In 2022, the ratio spiked to 20.28, reflecting a substantial improvement in the company's ability to generate revenue from its working capital. This surge may be attributable to either a significant decrease in working capital or a significant increase in sales.
In 2021, the ratio was 9.09, indicating that the company generated $9.09 in revenue for every $1 of working capital, signifying a moderate drop from the peak of the previous year.
In 2020, the working capital turnover ratio decreased to 4.89, suggesting a less efficient use of working capital compared to the previous year. However, without the data for 2019, it is challenging to provide a complete trend analysis.
Overall, the fluctuation in working capital turnover over the years indicates varying degrees of efficiency in utilizing working capital to generate revenue. It would be advisable to further analyze the individual components of working capital to discern the reasons behind these fluctuations and their impact on the company's overall performance.
Peer comparison
Dec 1, 2023