Paycom Soft (PAYC)

Working capital turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	1,883,200	1,693,670	1,375,220	1,055,520	841,434
Total current assets	US$ in thousands	4,304,800	2,813,430	2,764,170	2,252,040	1,864,600
Total current liabilities	US$ in thousands	3,906,800	2,534,640	2,377,040	1,990,410	1,718,030
Working capital turnover		4.73	6.08	3.55	4.03	5.74

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,883,200K ÷ ($4,304,800K – $3,906,800K)
= 4.73

The working capital turnover of Paycom Soft has displayed fluctuations over the years. In December 31, 2020, the ratio stood at 5.74, indicating that the company generated $5.74 in revenue for every dollar of working capital invested. Subsequently, the ratio decreased to 4.03 by December 31, 2021, suggesting a slight decline in efficiency.

However, in December 31, 2022 and December 31, 2024, the working capital turnover further decreased to 3.55 and 4.73 respectively, indicating a dip in the company's ability to generate revenue from its working capital.

Conversely, in December 31, 2023, Paycom Soft experienced an improvement in performance with a working capital turnover of 6.08, signaling an increased efficiency in utilizing its working capital to generate revenue.

Overall, the fluctuations in working capital turnover ratios suggest varying levels of efficiency in utilizing working capital to generate revenue over the years, with notable improvements in certain periods and a decline in others. Monitoring this ratio will be crucial for assessing the company's operational efficiency and financial health in the future.