Paycom Soft (PAYC)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,690,500	1,374,390	1,054,600	839,422	735,275
Total current assets	US$ in thousands	2,813,430	2,764,170	2,252,040	1,864,600	1,871,100
Total current liabilities	US$ in thousands	2,534,640	2,377,040	1,990,410	1,718,030	1,753,520
Working capital turnover		6.06	3.55	4.03	5.73	6.25

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,690,500K ÷ ($2,813,430K – $2,534,640K)
= 6.06

Paycom Software Inc's working capital turnover ratio has fluctuated over the past 5 years, ranging from 3.55 to 6.27. The working capital turnover ratio measures how efficiently the company is utilizing its working capital to support sales.

A higher working capital turnover ratio indicates that the company is efficiently using its working capital to generate sales revenue. In this case, Paycom Software Inc's working capital turnover has increased from 3.55 in 2022 to 6.08 in 2023, indicating an improvement in the efficiency of working capital utilization.

The company's working capital turnover ratio of 6.08 in 2023 suggests that for every dollar of working capital, Paycom Software Inc generated $6.08 in sales revenue. This indicates effective management of working capital to support revenue generation.

Overall, the increasing trend in the working capital turnover ratio over the years reflects positively on Paycom Software Inc's ability to efficiently convert working capital into sales, which can be a sign of sound financial management.