SolarEdge Technologies Inc (SEDG)

Working capital turnover

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Revenue (ttm)	US$ in thousands	1,046,751	1,511,153	2,237,038	2,976,528	3,551,186	3,662,604	3,399,088	3,110,279	2,771,492	2,461,173	2,213,456	1,963,865	1,770,057	1,581,748	1,433,542	1,459,271	1,519,387	1,591,848	1,585,007	1,425,660
Total current assets	US$ in thousands	2,118,120	2,893,200	2,989,070	3,304,310	3,363,470	3,449,120	3,242,070	2,899,660	2,451,770	2,283,810	2,462,320	1,711,290	1,552,550	1,488,910	1,585,110	1,719,340	1,744,980	1,073,000	955,919	932,763
Total current liabilities	US$ in thousands	903,812	566,824	658,890	893,231	876,651	897,729	900,042	889,717	694,480	612,174	568,741	525,181	405,507	399,585	397,726	436,099	382,537	405,065	389,681	436,714
Working capital turnover		0.86	0.65	0.96	1.23	1.43	1.44	1.45	1.55	1.58	1.47	1.17	1.66	1.54	1.45	1.21	1.14	1.12	2.38	2.80	2.87

September 30, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,046,751K ÷ ($2,118,120K – $903,812K)
= 0.86

The working capital turnover ratio is a measure of how efficiently a company is utilizing its working capital to generate sales. A higher turnover ratio indicates that the company is effectively managing its working capital to drive sales.

Analyzing SolarEdge Technologies Inc's working capital turnover over the past several quarters, we can see fluctuations in the ratio. The ratio has varied between 0.65 and 2.87, showing some volatility in the company's working capital management.

In the most recent quarter, the working capital turnover was 0.86, indicating that for every dollar of working capital invested, the company generated $0.86 in sales. This is a decrease from the previous quarter's ratio of 0.96, suggesting a potential inefficiency in utilizing working capital to drive revenue.

Looking at historical data, we can see that the company has experienced both lower and higher turnover ratios in the past, with the highest ratio of 2.87 in the first quarter of 2020. This could suggest that SolarEdge Technologies Inc has had periods of more efficient working capital management in the past.

Overall, it is essential for SolarEdge Technologies Inc to monitor and potentially improve its working capital turnover ratio to ensure efficient use of its working capital resources and maximize sales generation.