Synopsys Inc (SNPS)

Working capital turnover

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Revenue	US$ in thousands	5,842,620	5,081,540	4,204,190	3,685,280	3,360,690
Total current assets	US$ in thousands	3,430,620	3,012,670	2,808,340	2,549,220	1,738,920
Total current liabilities	US$ in thousands	2,985,450	2,774,500	2,413,480	2,139,920	1,752,450
Working capital turnover		13.12	21.34	10.65	9.00	—

October 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $5,842,620K ÷ ($3,430,620K – $2,985,450K)
= 13.12

The working capital turnover ratio for Synopsys, Inc. has shown fluctuations over the past five years. The ratio indicates the efficiency with which the company utilizes its working capital to generate sales revenue. A higher turnover ratio is generally favorable as it suggests that the company is efficiently utilizing its working capital to support sales.

In this case, the working capital turnover ratio was relatively high in 2022, at 21.34, indicating a strong ability to generate sales from its working capital. This may have been driven by effective management of current assets and liabilities to support sales activities.

However, in 2023, the working capital turnover ratio declined to 13.12. While still relatively high, the decrease from the previous year suggests a potential decrease in the efficiency of working capital utilization compared to the prior period. This could indicate a change in the company's operational efficiency or a shift in its working capital management strategies.

It's important to note that without additional information, it's difficult to precisely determine the reasons behind these fluctuations. Nonetheless, the analysis of the working capital turnover ratio provides insight into the company's ability to efficiently generate sales from its working capital over the years.