EPAM Systems Inc (EPAM)

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 4,656,750 4,778,720 4,882,220 4,826,940 4,720,160 4,556,090 4,307,578 4,075,331 3,750,945 3,360,418 3,033,459 2,780,002 2,654,811 2,570,115 2,496,974 2,421,783 2,281,749 2,155,221 2,037,895 1,935,517
Total current assets US$ in thousands 3,091,360 2,925,290 2,871,970 2,830,790 2,759,620 2,527,990 2,359,680 2,266,750 2,269,480 2,092,190 2,038,020 2,004,720 1,912,780 1,752,220 1,598,340 1,507,740 1,474,210 1,364,690 1,285,820 1,244,750
Total current liabilities US$ in thousands 644,932 613,578 584,065 682,858 747,483 727,957 684,703 683,252 763,420 632,547 522,948 463,761 465,950 414,831 365,580 389,321 386,948 311,470 272,614 282,566
Working capital turnover 1.90 2.07 2.13 2.25 2.35 2.53 2.57 2.57 2.49 2.30 2.00 1.80 1.83 1.92 2.03 2.17 2.10 2.05 2.01 2.01

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,656,750K ÷ ($3,091,360K – $644,932K)
= 1.90

The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is effectively managing its working capital to support its operations and generate sales.

In the case of EPAM Systems Inc, the working capital turnover has been decreasing over the quarters, from 2.66 in Q3 2022 to 2.12 in Q2 2023. This trend suggests that the company may be experiencing challenges in efficiently utilizing its working capital to support its sales activities.

A working capital turnover ratio of less than 1 may indicate inefficiencies in managing working capital, while a ratio greater than 1 demonstrates that the company is efficiently using its working capital to generate sales.

Overall, EPAM Systems Inc's working capital turnover ratio, ranging from 1.92 to 2.66 in the past eight quarters, indicates that the company has been relatively effective in utilizing its working capital to support its sales activities, although the decreasing trend in recent quarters may require further analysis to understand the underlying reasons and implications for the company's financial performance.