Cadence Design Systems Inc (CDNS)

Working capital turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	4,641,260	4,353,900	4,161,490	4,077,389	4,089,979	3,921,236	3,800,700	3,681,642	3,561,718	3,434,877	3,283,218	3,153,982	2,988,244	2,975,117	2,890,829	2,800,962	2,682,891	2,522,537	2,435,533	2,377,534
Total current assets	US$ in thousands	4,016,080	4,099,920	2,196,390	1,929,930	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
Total current liabilities	US$ in thousands	1,370,100	1,674,990	1,533,720	1,465,740	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
Working capital turnover		1.75	1.80	6.28	8.78	10.61	7.00	8.51	7.12	9.92	8.31	5.34	4.07	4.01	4.68	5.45	5.03	3.94	4.08	4.99	6.14

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,641,260K ÷ ($4,016,080K – $1,370,100K)
= 1.75

Cadence Design Systems Inc's working capital turnover has shown fluctuating trends over the periods from March 31, 2020, to December 31, 2024. The ratio started at 6.14 on March 31, 2020, indicating that the company generated $6.14 in revenue for every $1 of working capital invested. The ratio gradually decreased to 3.94 by December 31, 2020, signaling a decline in efficiency in utilizing working capital.

From March 31, 2021, to September 30, 2022, there was a slight recovery in the working capital turnover, reaching a peak of 9.92 on December 31, 2022. This significant improvement suggests that the company was effectively using its working capital to generate revenue efficiently during this period.

However, there was a subsequent decrease in the ratio, falling to 1.75 by December 31, 2024. This sharp decline may indicate inefficiencies or challenges in managing working capital effectively, potentially impacting the company's revenue generation capabilities.

Overall, Cadence Design Systems Inc's working capital turnover has shown both positive and negative trends, reflecting fluctuations in the company's ability to generate revenue relative to its working capital levels over the observed periods.