Guidewire Software Inc (GWRE)

Working capital turnover

		Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020
Revenue (ttm)	US$ in thousands	1,039,477	982,300	952,197	919,218	910,947	898,831	870,547	857,475	826,697	794,619	779,718	746,444	722,096	726,143	740,463	744,838	738,408	725,792	694,239	693,064
Total current assets	US$ in thousands	1,637,290	1,295,530	1,081,510	1,060,630	976,798	1,099,600	1,006,500	1,006,260	943,556	1,252,700	1,056,270	1,077,580	1,080,660	1,355,280	1,307,950	1,368,960	1,349,100	1,343,220	1,224,300	1,247,980
Total current liabilities	US$ in thousands	615,237	837,635	704,807	307,076	262,375	373,261	275,428	275,209	252,764	337,518	237,098	231,151	204,165	300,314	214,297	210,723	185,623	225,198	176,717	182,586
Working capital turnover		1.02	2.15	2.53	1.22	1.28	1.24	1.19	1.17	1.20	0.87	0.95	0.88	0.82	0.69	0.68	0.64	0.63	0.65	0.66	0.65

October 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,039,477K ÷ ($1,637,290K – $615,237K)
= 1.02

Guidewire Software Inc's working capital turnover has shown a fluctuating trend over the past few years. The ratio has increased from 0.65 in January 31, 2020, to 2.15 in July 31, 2024, before decreasing to 1.02 in October 31, 2024.

A working capital turnover ratio greater than 1 generally indicates that the company is efficiently using its working capital to generate sales. Guidewire Software Inc's working capital turnover improved significantly over the period, indicating a better utilization of its current assets to support its operations and generate revenue.

This upward trend suggests that Guidewire Software Inc has been able to effectively manage its working capital and convert it into sales, which may reflect positively on the company's operational efficiency and liquidity position. However, the decrease in the ratio in October 31, 2024, may be a point of concern, requiring further analysis to understand the underlying reasons behind this change.