Cadence Design Systems Inc (CDNS)

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	4,049,355	3,878,358	3,763,680	3,650,044	3,535,272	3,412,551	3,263,458	3,133,398	2,967,551	2,957,138	2,871,721	2,780,256	2,661,765	2,493,526	2,407,607	2,350,546	2,308,577	2,285,432	2,237,360	2,173,639
Total current assets	US$ in thousands	1,976,220	1,824,460	1,643,050	1,698,540	1,706,770	1,670,480	1,657,620	1,734,900	1,715,770	1,543,010	1,457,070	1,349,730	1,478,590	1,736,480	1,639,780	1,399,510	1,169,340	1,049,950	979,241	917,947
Total current liabilities	US$ in thousands	1,590,870	1,264,170	1,196,300	1,181,380	1,347,700	1,256,990	1,042,490	960,826	971,225	907,196	926,716	792,341	796,808	1,117,890	1,151,890	1,012,430	672,391	618,982	610,183	631,439
Working capital turnover		10.51	6.92	8.42	7.06	9.85	8.25	5.31	4.05	3.99	4.65	5.41	4.99	3.90	4.03	4.93	6.07	4.65	5.30	6.06	7.59

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,049,355K ÷ ($1,976,220K – $1,590,870K)
= 10.51

Cadence Design Systems, Inc.'s working capital turnover has fluctuated over the past eight quarters, ranging from 4.07 to 10.61. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher ratio indicates that the company is effectively using its working capital to support sales.

In Q4 2023, the working capital turnover was 10.61, which represents a significant improvement from the previous quarter's ratio of 7.00. This surge in efficiency suggests that Cadence Design Systems, Inc. was able to convert its working capital into sales at a much faster pace during this period.

Although there were fluctuations in the working capital turnover ratio throughout the quarters, it is evident that Cadence Design Systems, Inc. has managed to maintain a generally high level of efficiency in utilizing its working capital to generate revenue. This indicates that the company has been successful in effectively managing its working capital to support its operations and drive sales growth.