Duolingo Inc (DUOL)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	748,024	531,109	369,495	51	161,696
Total current assets	US$ in thousands	1,101,590	897,798	697,183	619,271	158,380
Total current liabilities	US$ in thousands	422,231	277,362	181,766	119,131	65,690
Working capital turnover		1.10	0.86	0.72	0.00	1.74

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $748,024K ÷ ($1,101,590K – $422,231K)
= 1.10

The working capital turnover ratio for Duolingo Inc has shown some fluctuation over the past five years. In December 2020, the ratio stood at 1.74, indicating that the company generated $1.74 in revenue for every dollar of working capital invested. However, there was a notable decline in performance in December 2021, with the ratio dropping to 0.00, which may raise concerns about the company's ability to efficiently utilize its working capital to generate revenue.

Subsequently, in December 2022, the working capital turnover ratio improved to 0.72, but it remained below the 2020 level. This indicates that Duolingo Inc may have faced challenges in effectively managing its working capital during that period. The ratio saw a slight uptick in December 2023 to 0.86, suggesting a modest improvement in the company's utilization of working capital to generate revenue.

By December 2024, the working capital turnover ratio of Duolingo Inc had increased to 1.10, showing a positive trend compared to the previous years. This indicates that the company may have made efforts to enhance its operational efficiency and optimize its working capital utilization.

Overall, the fluctuation in the working capital turnover ratio of Duolingo Inc over the past five years highlights the importance of effective working capital management in driving revenue generation and operational performance. The company should continue to monitor and improve its working capital turnover to ensure sustainable growth and profitability in the future.