ServiceNow Inc (NOW)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 10,984,000 | 8,971,000 | 7,245,000 | 5,896,000 | 4,519,000 |
| Total current assets | US$ in thousands | 9,187,000 | 7,777,000 | 6,654,000 | 5,220,000 | 4,522,000 |
| Total current liabilities | US$ in thousands | 8,358,000 | 7,365,000 | 6,005,000 | 4,949,000 | 3,737,000 |
| Working capital turnover | 13.25 | 21.77 | 11.16 | 21.76 | 5.76 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $10,984,000K ÷ ($9,187,000K – $8,358,000K)
= 13.25
ServiceNow Inc's working capital turnover has shown significant fluctuations over the past five years. The ratio increased from 5.76 in 2020 to 21.76 in 2021, indicating a substantial improvement in the efficiency of the company's working capital management. However, in 2022, the ratio dropped to 11.16, suggesting a potential decrease in the efficiency of utilizing working capital to generate sales.
In 2023, the working capital turnover ratio surged to 21.77, surpassing the peak of 2021, which indicates a strong performance in effectively converting working capital into revenue. Finally, in 2024, the ratio decreased to 13.25, indicating a slight decline in efficiency compared to the previous year.
Overall, fluctuations in ServiceNow Inc's working capital turnover suggest varying levels of efficiency in managing working capital to generate sales over the five-year period. Further analysis would be necessary to determine the specific factors contributing to these fluctuations and their impact on the company's financial performance.
Peer comparison
Dec 31, 2024