Dropbox Inc (DBX)

Working capital turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	2,501,200	2,468,800	2,433,900	2,382,200	2,335,500	2,303,700	2,255,600	2,216,900	2,163,200	2,076,300	2,014,200	1,949,500	1,922,000	1,858,000	1,793,900	1,723,900	1,622,000	1,587,000	1,520,200	1,459,100
Total current assets	US$ in thousands	1,516,600	1,467,100	1,380,500	1,399,700	1,489,800	1,579,700	1,593,100	1,622,900	1,849,800	2,056,300	2,067,300	2,034,000	1,227,500	1,330,200	1,222,300	1,195,200	1,243,200	1,133,600	1,067,700	1,007,600
Total current liabilities	US$ in thousands	1,201,500	1,196,800	1,177,200	1,152,500	1,196,500	1,156,400	1,135,700	1,117,400	1,175,800	1,175,100	1,125,000	1,074,900	1,087,800	1,026,900	981,800	970,800	1,014,800	948,300	903,100	865,800
Working capital turnover		7.94	9.13	11.97	9.64	7.96	5.44	4.93	4.39	3.21	2.36	2.14	2.03	13.76	6.13	7.46	7.68	7.10	8.56	9.24	10.29

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,501,200K ÷ ($1,516,600K – $1,201,500K)
= 7.94

Working capital turnover measures how efficiently a company utilizes its working capital to generate revenue. A higher working capital turnover ratio indicates that the company is generating more revenue with each dollar of working capital.

Analyzing Dropbox Inc's working capital turnover over the past eight quarters reveals a fluctuating trend. In Q1 2022, the ratio stood at 4.37, indicating that Dropbox generated $4.37 in revenue for every dollar of working capital. Over the subsequent quarters, the ratio increased steadily, reaching a peak of 11.92 in Q2 2023, suggesting improved efficiency in utilizing working capital during that period.

However, in Q3 2023 and Q4 2023, the working capital turnover ratio decreased to 9.12 and 7.94, respectively. This decline may indicate that Dropbox's ability to generate revenue from its working capital decreased during those quarters compared to the peak in Q2 2023. Overall, the average working capital turnover for the past eight quarters was 7.06, implying that for every dollar of working capital, Dropbox generated approximately $7.06 in revenue on average.

Dropbox Inc's management should further investigate the factors contributing to the fluctuations in the working capital turnover ratio to optimize their working capital management and enhance operational efficiency.