Synopsys Inc (SNPS)

Working capital turnover

		Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020
Revenue	US$ in thousands	6,127,440	5,842,620	5,081,540	4,204,190	3,685,280
Total current assets	US$ in thousands	6,469,670	3,430,620	3,012,670	2,808,340	2,549,220
Total current liabilities	US$ in thousands	2,650,120	2,985,450	2,774,500	2,413,480	2,139,920
Working capital turnover		1.60	13.12	21.34	10.65	9.00

October 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $6,127,440K ÷ ($6,469,670K – $2,650,120K)
= 1.60

Synopsys Inc's working capital turnover has fluctuated over the past five years, ranging from a low of 1.60 in 2024 to a high of 21.34 in 2022. The working capital turnover ratio measures how efficiently a company is able to generate revenue from its working capital. A higher ratio indicates that the company is effectively managing its working capital to generate sales.

The significant increase in the working capital turnover from 2020 to 2022 suggests that Synopsys Inc improved its efficiency in utilizing its working capital to generate revenue during this period. However, the sharp decrease in 2023 and 2024 may indicate potential issues in managing working capital effectively or changes in business operations impacting the turnover ratio.

Further analysis of the company's working capital components and overall financial performance would provide a more comprehensive understanding of the factors driving the changes in working capital turnover over the years and help evaluate Synopsys Inc's operational efficiency and financial health.