Altair Engineering Inc (ALTR)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	665,788	612,701	572,221	532,179	469,921
Total current assets	US$ in thousands	784,978	700,623	526,826	588,221	386,935
Total current liabilities	US$ in thousands	487,769	324,110	232,738	473,978	200,754
Working capital turnover		2.24	1.63	1.95	4.66	2.52

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $665,788K ÷ ($784,978K – $487,769K)
= 2.24

Altair Engineering Inc's working capital turnover has exhibited fluctuations over the five-year period from December 31, 2020, to December 31, 2024. The working capital turnover ratio measures a company's efficiency in managing its working capital to generate sales revenue.

In December 31, 2020, Altair Engineering Inc had a working capital turnover of 2.52, indicating that for every dollar of working capital, the company generated $2.52 of sales revenue. This ratio increased significantly to 4.66 by December 31, 2021, showcasing improved efficiency in utilizing its working capital to drive sales.

However, the trend reversed in the following years, with the working capital turnover decreasing to 1.95 by December 31, 2022, and further dropping to 1.63 by December 31, 2023. These lower ratios suggest that Altair Engineering Inc's ability to convert working capital into sales revenue declined during these periods.

By December 31, 2024, the working capital turnover ratio slightly improved to 2.24, indicating a partial recovery in efficiency in utilizing working capital to generate sales revenue compared to the previous year.

Overall, Altair Engineering Inc's working capital turnover ratios have shown variability, with periods of improvement followed by declines. It is essential for the company to closely monitor and manage its working capital to maintain optimal efficiency in generating sales revenue.