PC Connection Inc (CNXN)
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 | 2,806,655 | 2,795,924 | 2,762,593 | 2,759,661 | 2,850,161 | 2,886,154 | 2,968,760 | 3,063,722 | 3,124,985 | 3,192,747 | 3,168,423 | 3,044,075 | 2,892,633 | 2,768,107 | 2,669,491 | 2,515,332 | 2,590,290 | 2,631,231 | 2,707,889 | 2,898,963 |
| Total current assets | US$ in thousands | 1,166,850 | 1,151,730 | 1,147,500 | 1,023,360 | 1,048,640 | 1,040,700 | 1,021,930 | 974,116 | 953,792 | 986,257 | 975,375 | 950,740 | 932,413 | 862,279 | 877,988 | 802,851 | 858,980 | 843,716 | 791,741 | 748,983 |
| Total current liabilities | US$ in thousands | 371,205 | 367,453 | 388,642 | 289,808 | 327,965 | 339,963 | 347,305 | 318,309 | 310,517 | 352,920 | 366,883 | 369,803 | 374,632 | 293,348 | 330,494 | 274,944 | 342,260 | 338,360 | 308,207 | 277,309 |
| Working capital turnover | 3.53 | 3.56 | 3.64 | 3.76 | 3.95 | 4.12 | 4.40 | 4.67 | 4.86 | 5.04 | 5.21 | 5.24 | 5.19 | 4.87 | 4.88 | 4.76 | 5.01 | 5.21 | 5.60 | 6.15 |
December 31, 2024 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,806,655K ÷ ($1,166,850K – $371,205K)
= 3.53
PC Connection Inc's working capital turnover has shown a declining trend over the past few years. Starting at 6.15 in March 2020, the working capital turnover ratio decreased consistently, reaching 3.53 by December 2024. This indicates that the company's ability to efficiently utilize its working capital to generate sales revenue has weakened over time.
A working capital turnover ratio below 1.0 generally signifies that the company may be inefficiently managing its working capital, potentially leading to excess inventory or slow collection of receivables. In the case of PC Connection Inc, the downward trend in the ratio suggests a need for the company to closely monitor and improve its working capital management practices.
A lower working capital turnover ratio could indicate issues such as inadequate inventory control, credit management problems, or inefficient cash flow management. Therefore, PC Connection Inc may benefit from implementing strategies to streamline its working capital turnover, such as optimizing inventory levels, improving collections processes, or negotiating more favorable credit terms with suppliers.
Overall, PC Connection Inc's declining working capital turnover ratio highlights the importance of actively managing working capital efficiency to support sustainable business operations and financial performance.
Peer comparison
Dec 31, 2024