Etsy Inc (ETSY)

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	2,748,377	2,713,296	2,671,463	2,627,722	2,566,111	2,476,009	2,413,969	2,357,734	2,329,114	2,229,330	2,148,379	2,048,216	1,725,625	1,378,268	1,124,737	877,095	818,379	748,409	700,828	652,120
Total current assets	US$ in thousands	1,570,450	1,343,860	1,413,760	1,344,950	1,513,740	1,352,110	1,320,220	1,295,140	1,341,500	1,077,330	2,690,980	1,893,620	1,894,780	1,697,830	1,194,340	906,952	921,038	945,840	743,653	724,001
Total current liabilities	US$ in thousands	710,781	548,817	503,219	499,113	631,755	497,246	449,902	483,205	615,588	471,007	407,000	427,045	454,664	340,942	279,579	158,849	188,528	154,707	166,510	148,675
Working capital turnover		3.20	3.41	2.93	3.11	2.91	2.90	2.77	2.90	3.21	3.68	0.94	1.40	1.20	1.02	1.23	1.17	1.12	0.95	1.21	1.13

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $2,748,377K ÷ ($1,570,450K – $710,781K)
= 3.20

Etsy Inc's working capital turnover ratio fluctuated over the past eight quarters, ranging from a low of 2.77 in Q2 2022 to a high of 3.41 in Q3 2023. A higher working capital turnover ratio indicates that the company is efficiently using its working capital to generate sales revenue.

The downward trend from Q3 2023 (3.41) to Q2 2023 (2.93) may suggest a potential decrease in the efficiency of Etsy's working capital management during that period. However, the ratio improved in Q4 2023 (3.20), indicating a better utilization of working capital towards revenue generation.

Overall, maintaining a working capital turnover ratio above 3 demonstrates that Etsy Inc is effectively leveraging its current assets and liabilities to support its sales activities. It is essential for the company to continue monitoring and managing its working capital efficiently to sustain its operational performance and profitability in the long run.