Copart Inc (CPRT)
Working capital turnover
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,646,960 | 4,236,820 | 3,869,520 | 3,500,920 | 2,692,510 |
| Total current assets | US$ in thousands | 5,638,480 | 4,418,180 | 3,262,600 | 2,202,460 | 1,702,610 |
| Total current liabilities | US$ in thousands | 683,281 | 628,567 | 492,769 | 440,889 | 421,031 |
| Working capital turnover | 0.94 | 1.12 | 1.40 | 1.99 | 2.10 |
July 31, 2025 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,646,960K ÷ ($5,638,480K – $683,281K)
= 0.94
The analysis of Copart Inc's working capital turnover over the specified period reveals a consistent decline in the efficiency with which the company utilizes its working capital to generate sales. As of July 31, 2021, the working capital turnover ratio was 2.10, indicating that for every dollar of working capital employed, the company generated approximately $2.10 in sales. By July 31, 2022, this ratio decreased marginally to 1.99, suggesting a slight reduction in operational efficiency.
The downward trend persisted into the subsequent years, with the ratio falling further to 1.40 by July 31, 2023. This notable decline indicates that the company is generating significantly less sales per dollar of working capital compared to earlier periods. The downward movement continued, reaching 1.12 as of July 31, 2024, and further decreasing to 0.94 by July 31, 2025.
This sustained reduction in working capital turnover implies that Copart Inc has become less effective in leveraging its working capital to support its sales activities over time. Potential factors contributing to this trend could include increased investment in working capital assets that have not proportionally translated into higher sales or a strategic decision to hold more working capital for operational flexibility amidst changing market conditions. Overall, the declining ratios reflect a diminishing efficiency in the company's operational management concerning working capital utilization over the observed period.