SPS Commerce Inc (SPSC)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	536,910	450,875	385,276	312,630	279,124
Total current assets	US$ in thousands	401,441	322,814	352,443	271,356	291,621
Total current liabilities	US$ in thousands	130,669	110,642	102,872	80,132	68,030
Working capital turnover		1.98	2.13	1.54	1.63	1.25

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $536,910K ÷ ($401,441K – $130,669K)
= 1.98

The working capital turnover of SPS Commerce Inc. has fluctuated over the past five years, ranging from 1.25 in 2019 to 2.13 in 2022. The working capital turnover indicates how efficiently the company is utilizing its working capital to generate sales revenue. A higher working capital turnover ratio suggests that the company is generating more sales revenue relative to its investment in working capital.

In 2023, the working capital turnover decreased to 1.98 from the previous year's high of 2.13. This decline may indicate that there was a decrease in sales relative to the amount of working capital invested during the year.

Overall, SPS Commerce Inc. has generally shown efficiency in utilizing its working capital to generate sales revenue, with fluctuations in the ratio over the years reflecting changes in the company's operational efficiency and effectiveness in managing its working capital.