Paycom Soft (PAYC)

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	1,691,704	1,627,240	1,554,308	1,470,341	1,373,921	1,289,146	1,211,791	1,137,067	1,054,755	990,668	931,006	870,744	841,015	813,477	792,091	779,562	736,337	693,260	651,802	611,547
Total current assets	US$ in thousands	2,813,430	2,562,970	2,708,190	3,054,690	2,764,170	2,228,360	3,847,990	4,434,300	2,252,040	3,313,180	2,356,520	2,624,210	1,864,600	1,778,320	1,240,060	1,651,560	1,871,100	1,012,980	1,287,990	1,549,480
Total current liabilities	US$ in thousands	2,534,640	2,069,910	2,186,730	2,565,100	2,377,040	1,897,760	3,568,470	4,112,530	1,990,410	3,086,270	2,145,210	2,425,570	1,718,030	1,627,800	1,117,250	1,497,920	1,753,520	918,478	1,201,280	1,483,710
Working capital turnover		6.07	3.30	2.98	3.00	3.55	3.90	4.34	3.53	4.03	4.37	4.41	4.38	5.74	5.40	6.45	5.07	6.26	7.34	7.52	9.30

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,691,704K ÷ ($2,813,430K – $2,534,640K)
= 6.07

Working capital turnover is a financial ratio that measures how efficiently a company is utilizing its working capital to generate sales revenue. A higher working capital turnover ratio indicates that the company is more efficient in managing its working capital to generate sales.

Based on the data provided for Paycom Software Inc, the working capital turnover has fluctuated over the past eight quarters. The working capital turnover ratio ranged from 2.99 to 6.08 during this period.

The trend shows that the working capital turnover ratio peaked in Q4 2023 at 6.08, indicating that Paycom Software Inc was able to generate $6.08 in sales revenue for every $1 of working capital invested. This suggests a high level of efficiency in managing working capital.

However, the working capital turnover ratio decreased in the following quarters, reaching a low of 2.99 in Q2 2023. This could signal potential challenges in managing working capital efficiently during that period.

Overall, it is important for Paycom Software Inc to monitor and analyze its working capital turnover ratio consistently to ensure effective management of working capital and maximize revenue generation.