PriceSmart Inc (PSMT)

Working capital turnover

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Revenue	US$ in thousands	4,893,960	4,384,770	4,066,090	3,619,870	3,329,190
Total current assets	US$ in thousands	832,347	877,107	773,579	697,204	699,002
Total current liabilities	US$ in thousands	680,148	634,477	579,456	533,552	568,275
Working capital turnover		32.16	18.07	20.95	22.12	25.47

August 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,893,960K ÷ ($832,347K – $680,148K)
= 32.16

PriceSmart Inc's working capital turnover has shown fluctuations over the past five years. The working capital turnover ratio measures how efficiently the company is utilizing its working capital to generate sales revenue. A higher ratio indicates that the company is effectively leveraging its working capital.

In 2024, PriceSmart Inc's working capital turnover ratio significantly increased to 32.16 compared to the previous year. This may signal that the company improved its efficiency in converting working capital into sales revenue.

In 2023, there was a notable decrease in the working capital turnover ratio to 18.07. This drop could indicate potential inefficiencies in managing working capital or a decrease in sales relative to the working capital invested.

In 2022 and 2021, the working capital turnover ratios remained relatively stable at 20.95 and 22.12, respectively. This suggests that the company maintained a consistent level of efficiency in utilizing its working capital during those years.

In 2020, PriceSmart Inc recorded a working capital turnover ratio of 25.47, indicating a higher level of efficiency compared to the following years. This may reflect effective management of working capital resources to support sales activities.

Overall, PriceSmart Inc's working capital turnover ratios have varied over the years, indicating fluctuations in the company's ability to convert working capital into revenue. Further analysis of the underlying factors affecting working capital management and sales performance would be necessary to fully understand the fluctuations in the ratios and the company's overall financial health.