Super Micro Computer Inc (SMCI)

Working capital turnover

		Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019
Revenue	US$ in thousands	7,123,480	5,196,100	3,557,420	3,339,280	3,500,360
Total current assets	US$ in thousands	3,179,430	2,806,320	1,867,260	1,592,760	1,421,770
Total current liabilities	US$ in thousands	1,374,650	1,470,020	968,896	707,635	605,969
Working capital turnover		3.95	3.89	3.96	3.77	4.29

June 30, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,123,480K ÷ ($3,179,430K – $1,374,650K)
= 3.95

The working capital turnover for Super Micro Computer Inc has shown some fluctuation over the past five years. The ratio indicates how efficiently the company is utilizing its working capital to generate sales. A higher turnover ratio is generally favorable as it suggests that the company is effectively using its working capital to support sales activities.

In the fiscal year ending June 30, 2019, the company achieved a working capital turnover of 4.29, which indicates a high level of efficiency in utilizing its working capital to generate sales. However, this efficiency decreased in the following years, with ratios of 3.77 in 2020, 3.96 in 2021, and 3.89 in 2022. Notably, there was a slight improvement in the efficiency of working capital usage in 2023, with the ratio reaching 3.95.

Overall, the company's working capital turnover has remained relatively stable over the years, albeit with some variations. This suggests that Super Micro Computer Inc has been able to consistently utilize its working capital to support its sales activities, although there has been some fluctuation in efficiency. Further analysis of the company's working capital management and sales strategies would provide insights into the underlying factors driving these fluctuations.