SPS Commerce Inc (SPSC)

Working capital turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Revenue (ttm) US$ in thousands 637,765 611,823 583,798 560,618 536,910 513,963 492,788 471,550 450,875 431,613 415,014 400,375 385,276 365,828 347,498 328,532 312,630 302,055 293,426 286,382
Total current assets US$ in thousands 381,907 344,647 406,938 420,288 401,441 359,739 384,976 346,382 322,814 339,273 365,549 351,467 352,443 343,255 323,162 296,874 271,356 337,008 303,977 289,854
Total current liabilities US$ in thousands 146,684 146,331 128,546 134,216 130,669 132,871 111,968 106,961 110,642 105,466 101,239 94,428 102,872 94,928 91,437 83,432 80,132 70,389 66,735 61,903
Working capital turnover 2.71 3.09 2.10 1.96 1.98 2.27 1.81 1.97 2.13 1.85 1.57 1.56 1.54 1.47 1.50 1.54 1.63 1.13 1.24 1.26

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $637,765K ÷ ($381,907K – $146,684K)
= 2.71

The working capital turnover ratio for SPS Commerce Inc has shown fluctuations over the past few quarters, reflecting changes in the efficiency of the company's working capital management.

From March 31, 2020, to June 30, 2020, the ratio slightly decreased from 1.26 to 1.24, indicating a marginal decline in the efficiency of working capital utilization. This trend continued until September 30, 2020, when the ratio dropped further to 1.13, suggesting potential inefficiencies in utilizing working capital during that period.

However, starting from December 31, 2020, there was a significant improvement in the working capital turnover ratio, which increased to 1.63. This improvement continued into the following quarters, with the ratio staying relatively consistent around the 1.50 to 1.60 range.

Notably, by September 30, 2022, there was a substantial increase in the working capital turnover ratio to 1.85, indicating a more efficient use of working capital. This positive trend continued into the following quarters, with the ratio reaching its peak at 3.09 as of September 30, 2024, showing a significant enhancement in working capital management efficiency.

While there was a slight decrease in the ratio in December 31, 2024, to 2.71, overall, the working capital turnover ratio has shown an upward trajectory, reflecting improvements in the company's ability to generate revenue from its working capital investments.

This analysis suggests that SPS Commerce Inc has made strides in optimizing its working capital efficiency, which can positively impact its overall financial performance and liquidity management.