Certara Inc (CERT)

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 385,148 372,797 363,553 360,690 354,337 352,960 352,084 344,394 335,644 324,357 313,601 300,937 286,104 275,399 261,772 252,799 243,530 232,746 225,915 215,376
Total current assets US$ in thousands 310,852 350,609 337,076 328,457 340,201 369,777 353,044 348,254 342,252 305,092 286,019 275,186 274,727 504,849 344,808 347,561 346,584 92,798 121,591 29,256
Total current liabilities US$ in thousands 146,088 122,705 129,123 100,629 130,023 105,427 102,896 93,816 103,158 76,530 81,545 81,617 92,225 69,634 59,249 63,372 75,345 60,341 56,981 —
Working capital turnover 2.34 1.64 1.75 1.58 1.69 1.34 1.41 1.35 1.40 1.42 1.53 1.55 1.57 0.63 0.92 0.89 0.90 7.17 3.50 7.36

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $385,148K ÷ ($310,852K – $146,088K)
= 2.34

The working capital turnover of Certara Inc has shown fluctuations over the periods analyzed. The working capital turnover ratio measures a company's ability to efficiently utilize its working capital to generate sales revenue. A higher ratio generally indicates better efficiency in managing working capital.

In the first quarter of 2020, Certara Inc had a relatively high working capital turnover of 7.36, indicating that the company efficiently converted its working capital into sales. However, in the subsequent quarters of 2020 and into 2021, the ratio declined significantly to below 1.0, suggesting a decrease in the efficiency of working capital utilization.

Throughout 2021 and early 2022, the working capital turnover ratio remained relatively low, hovering around 1.0, indicating ongoing challenges in efficiently converting working capital into sales. However, there was a slight improvement in the ratio towards the end of 2022 and into 2023, reaching around 1.69 by the end of December 2023.

In the following periods from 2024, the working capital turnover ratio continued to improve, reaching 2.34 by December 31, 2024. This upward trend suggests that Certara Inc was able to enhance its efficiency in utilizing working capital to generate sales revenue.

Overall, the analysis of Certara Inc's working capital turnover indicates fluctuations in efficiency over the periods examined, with a notable improvement in the latter half of 2024. This improvement suggests potential enhancements in working capital management practices that may positively impact the company's financial performance.