Penguin Solutions, Inc. (PENG)
Working capital turnover
| May 31, 2025 | Feb 28, 2025 | Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 1,342,020 | 1,318,349 | 1,237,651 | 1,170,796 | 1,022,916 | 1,066,754 | 1,170,310 | 1,287,860 | 1,562,289 | 1,680,411 | 1,741,205 | 1,819,352 | 1,849,364 | 1,824,552 | 1,679,390 | 1,501,143 | 1,330,464 | 1,174,023 | 1,142,056 | 1,122,377 |
| Total current assets | US$ in thousands | 1,249,900 | 1,244,760 | 995,579 | 867,704 | 942,327 | 884,730 | 986,848 | 907,402 | 938,911 | 978,170 | 1,121,910 | 1,151,860 | 1,167,570 | 1,131,720 | 943,837 | 950,818 | 806,245 | 578,827 | 558,523 | 556,710 |
| Total current liabilities | US$ in thousands | 476,744 | 473,705 | 426,886 | 327,596 | 351,142 | 267,959 | 368,804 | 426,250 | 384,305 | 420,447 | 551,807 | 515,540 | 524,896 | 533,804 | 535,119 | 583,798 | 492,218 | 323,024 | 282,568 | 282,489 |
| Working capital turnover | 1.74 | 1.71 | 2.18 | 2.17 | 1.73 | 1.73 | 1.89 | 2.68 | 2.82 | 3.01 | 3.05 | 2.86 | 2.88 | 3.05 | 4.11 | 4.09 | 4.24 | 4.59 | 4.14 | 4.09 |
May 31, 2025 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,342,020K ÷ ($1,249,900K – $476,744K)
= 1.74
The analysis of Penguin Solutions, Inc.'s working capital turnover over the period from August 2020 through May 2025 reveals a significant downward trend. Initially, the ratio fluctuated around mid-four range, with values such as 4.09 in August 2020 and a slight increase to 4.59 by February 2021, indicating efficient utilization of working capital to generate revenue during that period. Subsequently, the ratio experienced minor fluctuations, maintaining generally stable levels between approximately 4.09 and 4.14 until August 2021.
From late 2021 onward, a marked decline becomes evident. The ratio declined sharply to around 3.05 in February 2022, and further decreased to approximately 2.88 in May 2022, and stabilized near 2.86 to 3.05 through late 2022 into early 2023. This sustained decline indicates diminishing efficiency in converting working capital into sales revenue over this period.
A more pronounced decrease is observable starting in August 2023, with the ratio falling to 2.68, then plunging to nearly 1.89 in November 2023, and further to 1.73 by February 2024 and May 2024. This substantial reduction suggests the company is utilizing its working capital less effectively in generating sales, which could be indicative of increased working capital levels or decreased sales relative to working capital.
In the latest period, from August 2024 through May 2025, the ratio exhibits slight recovery, rising from 2.17 in August 2024 to 2.18 in November 2024, and then marginally increasing to around 1.71 to 1.74 in early 2025. Despite this partial uptick, the ratio remains significantly lower than the earlier peak levels observed in 2020 and early 2021.
Overall, the trend reflects a considerable decline in working capital turnover, suggesting decreased efficiency in managing working capital relative to sales or potentially altered operational strategies, sales volumes, or inventory levels. This decline warrants further investigation into underlying causes such as changes in receivables, payables, inventory management, or shifts in revenue generation efficiency.
Peer comparison
May 31, 2025