Paychex Inc (PAYX)
Working capital turnover
| May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 5,571,700 | 5,278,300 | 5,007,100 | 4,611,700 | 4,056,800 |
| Total current assets | US$ in thousands | 8,916,500 | 7,251,500 | 7,528,100 | 6,581,600 | 6,169,500 |
| Total current liabilities | US$ in thousands | 6,956,300 | 5,309,100 | 5,805,400 | 5,269,200 | 4,938,200 |
| Working capital turnover | 2.84 | 2.72 | 2.91 | 3.51 | 3.29 |
May 31, 2025 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $5,571,700K ÷ ($8,916,500K – $6,956,300K)
= 2.84
The working capital turnover ratio for Paychex Inc. demonstrates fluctuations over the observed period from May 31, 2021, to May 31, 2025. Specifically, the ratio increased from 3.29 in 2021 to a peak of 3.51 in 2022, indicating a period where the company's efficiency in utilizing its working capital to generate revenue improved. However, subsequent years reveal a decline: the ratio decreased to 2.91 in 2023 and further to 2.72 in 2024, suggesting a reduction in operational efficiency or a change in working capital management. A modest recovery is noted in 2025, with the ratio rising slightly to 2.84, but it remains below the 2022 peak.
This trend indicates that, over time, Paychex Inc. has experienced a decline in how effectively it employs its working capital to support revenue generation, with some degree of stabilization occurring towards the end of the observed period. The variations may reflect changes in operational dynamics, asset management strategies, or revenue cycles, warranting further investigation to understand underlying causes fully.