Simulations Plus Inc (SLP)

Working capital turnover

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Revenue	US$ in thousands	74,774	59,577	53,906	46,466	41,589
Total current assets	US$ in thousands	39,341	130,372	146,790	139,313	129,092
Total current liabilities	US$ in thousands	12,069	11,987	7,735	11,574	5,506
Working capital turnover		2.74	0.50	0.39	0.36	0.34

August 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $74,774K ÷ ($39,341K – $12,069K)
= 2.74

The working capital turnover ratio for Simulations Plus Inc has shown a consistent increase over the past five years, reaching 2.74 in 2024 from 0.50 in 2023. This indicates that the company is generating $2.74 in revenue for every dollar of working capital invested in the business in 2024.

The significant improvement in the working capital turnover ratio suggests that the company has become more efficient in utilizing its working capital to generate sales revenue. This could be attributed to better inventory management, faster collection of receivables, or more effective management of payables.

The consistent increase in the working capital turnover ratio reflects positively on the company's operational efficiency and ability to leverage its working capital effectively to support its business activities and generate revenue. This trend indicates a strengthening financial position for Simulations Plus Inc over the analyzed period.