Paylocity Holdng (PCTY)

Working capital turnover

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Revenue	US$ in thousands	1,402,520	1,174,600	852,651	635,627	561,329
Total current assets	US$ in thousands	3,524,490	3,048,440	4,231,680	2,032,880	1,663,150
Total current liabilities	US$ in thousands	3,117,360	2,774,800	4,120,530	1,867,020	1,408,940
Working capital turnover		3.44	4.29	7.67	3.83	2.21

June 30, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,402,520K ÷ ($3,524,490K – $3,117,360K)
= 3.44

The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue. A higher ratio indicates better efficiency in using its current assets and liabilities to support sales.

From the data provided, Paylocity Holdng experienced fluctuations in its working capital turnover ratio over the past five years. In the most recent fiscal year ending June 30, 2024, the company achieved a working capital turnover ratio of 3.44, showing a decline from the previous year's ratio of 4.29. This suggests that the company may have become less efficient in converting its working capital into revenue.

Comparing the ratios over the five-year period, we observe that Paylocity Holdng had the highest working capital turnover ratio in June 30, 2022, at 7.67, indicating a period of strong efficiency in utilizing its current assets and liabilities to drive sales. In contrast, the lowest ratio was recorded in June 30, 2020, at 2.21, suggesting a lower level of efficiency in capital utilization during that period.

Overall, the trend in Paylocity Holdng's working capital turnover ratio fluctuates, indicating varying levels of efficiency in managing its working capital over the years. Further analysis and comparison with industry peers may provide additional insights into the company's working capital management performance.