Simulations Plus Inc (SLP)

Working capital turnover

		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	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Revenue (ttm)	US$ in thousands	64,668	62,113	59,577	55,682	54,407	53,453	53,906	52,013	49,831	48,182	46,466	46,165	45,686	42,889	41,589	40,075	37,714	35,836	33,971	32,633
Total current assets	US$ in thousands	127,957	129,687	130,372	137,309	131,474	148,734	146,790	144,854	143,626	139,906	139,313	138,698	135,553	131,232	129,092	22,184	24,676	23,093	21,165	21,258
Total current liabilities	US$ in thousands	14,528	8,588	11,987	9,022	6,002	8,039	7,735	5,915	9,004	9,615	11,574	7,340	6,541	5,477	5,506	7,785	5,481	5,633	4,783	5,074
Working capital turnover		0.57	0.51	0.50	0.43	0.43	0.38	0.39	0.37	0.37	0.37	0.36	0.35	0.35	0.34	0.34	2.78	1.96	2.05	2.07	2.02

February 29, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $64,668K ÷ ($127,957K – $14,528K)
= 0.57

The working capital turnover ratio of Simulations Plus Inc has fluctuated over the past years, ranging from as low as 0.34 to as high as 2.78. This ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue.

A higher working capital turnover ratio generally suggests that the company is effectively managing its working capital to support sales growth. In contrast, a lower ratio could indicate inefficiencies in managing working capital, potentially leading to excess inventory or slow collection of receivables.

In the most recent periods, the working capital turnover ratio has been relatively stable around 0.50 to 0.57. While it is lower compared to the unusually high ratios recorded in early 2020, the current levels still indicate a reasonable efficiency in converting working capital into sales.

Overall, the trend in the working capital turnover ratio for Simulations Plus Inc suggests that the company has been maintaining a satisfactory level of efficiency in utilizing its working capital to support its operations and generate revenue.