SolarEdge Technologies Inc (SEDG)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	2,976,530	3,110,280	1,963,860	1,459,270	1,425,660
Total current assets	US$ in thousands	3,304,310	2,899,660	1,711,290	1,719,340	932,763
Total current liabilities	US$ in thousands	893,231	889,717	525,181	436,099	436,714
Working capital turnover		1.23	1.55	1.66	1.14	2.87

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,976,530K ÷ ($3,304,310K – $893,231K)
= 1.23

Solaredge Technologies Inc's working capital turnover has fluctuated over the past five years, ranging from a low of 1.14 in 2020 to a high of 2.87 in 2019. The working capital turnover ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue.

A higher working capital turnover ratio suggests that the company is efficiently managing its working capital to support its operations and sales. On the other hand, a lower ratio may indicate inefficiencies in managing working capital, potentially leading to excess inventory or slow collection of receivables.

In this case, Solaredge Technologies Inc's working capital turnover ratio has shown some variability over the years, which could imply fluctuations in the company's working capital management efficiency. It is important for the company to analyze the reasons behind these fluctuations and implement strategies to maintain an optimal level of working capital turnover to support sustainable growth and profitability.