CSG Systems International Inc (CSGS)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,170,020	1,091,100	1,044,030	990,533	996,810
Total current assets	US$ in thousands	862,226	765,955	748,199	714,591	669,082
Total current liabilities	US$ in thousands	560,836	527,209	695,102	436,260	418,693
Working capital turnover		3.88	4.57	19.66	3.56	3.98

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,170,020K ÷ ($862,226K – $560,836K)
= 3.88

Working capital turnover is a financial ratio that measures a company's efficiency in utilizing its working capital to generate sales revenue. A higher working capital turnover indicates that the company is effectively managing its working capital to support its operations.

In the case of CSG Systems International Inc., the working capital turnover has fluctuated over the past five years. In 2021, the company had a significantly high working capital turnover of 19.71, suggesting a very efficient use of working capital to generate sales. This may indicate aggressive management of accounts receivable, inventory, and accounts payable.

However, the working capital turnover decreased to 3.56 in 2020, indicating a less efficient utilization of working capital relative to sales. The subsequent years also showed varying levels of working capital turnover (3.88 in 2023, 4.56 in 2022, and 3.98 in 2019), reflecting fluctuations in the company's working capital management efficiency.

Overall, it is essential for CSG Systems International Inc. to maintain a balance in working capital turnover, ensuring that working capital is effectively deployed to support operations while also optimizing sales revenue generation. Management should closely monitor working capital turnover trends to assess the effectiveness of their working capital management strategies.