Penguin Solutions, Inc. (PENG)

Working capital turnover

Aug 31, 2024 Aug 31, 2023 Aug 31, 2022 Aug 31, 2021 Aug 31, 2020
Revenue US$ in thousands 1,170,800 1,441,250 1,395,880 1,055,530 1,122,380
Total current assets US$ in thousands 867,704 907,402 1,151,860 950,818 556,710
Total current liabilities US$ in thousands 327,596 426,250 515,540 583,798 282,489
Working capital turnover 2.17 3.00 2.19 2.88 4.09

August 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,170,800K ÷ ($867,704K – $327,596K)
= 2.17

The analysis of Penguin Solutions, Inc.'s working capital turnover ratio over the period from August 31, 2020, to August 31, 2024, reveals notable fluctuations in operational efficiency related to working capital utilization. In the fiscal year ending August 31, 2020, the ratio was 4.09, indicating a relatively high level of sales generated per dollar of working capital invested, suggestive of efficient management during that period.

Subsequently, the ratio declined markedly to 2.88 in August 31, 2021, and further decreased to 2.19 by August 31, 2022, reflecting a reduction in the company's ability to efficiently use its working capital to generate sales. This downward trend may point to increased working capital levels, decreased sales efficiency, or a combination of both factors during this period.

However, a partial recovery is observed in the fiscal year ending August 31, 2023, when the ratio increased to 3.00, indicating some improvement in working capital efficiency or sales volume relative to working capital. Despite this rebound, the ratio declined again to 2.17 as of August 31, 2024, indicating a renewed decrease in the efficiency of working capital utilization.

Overall, the pattern of fluctuations suggests that Penguin Solutions, Inc. experienced periods of declining operational efficiency with respect to its working capital, punctuated by brief phases of recovery. These changes could be driven by variations in sales performance, working capital management strategies, or shifts in inventory and receivables levels. Continuous monitoring and analysis of underlying operational factors are necessary to understand the causes of these fluctuations and to evaluate the company's ongoing working capital management effectiveness.