Tandem Diabetes Care Inc (TNDM)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	735,632	795,009	696,759	486,025	362,227
Total current assets	US$ in thousands	747,989	849,976	811,520	637,235	276,141
Total current liabilities	US$ in thousands	195,258	165,290	131,856	103,852	99,396
Working capital turnover		1.33	1.16	1.03	0.91	2.05

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $735,632K ÷ ($747,989K – $195,258K)
= 1.33

The working capital turnover ratio for Tandem Diabetes Care Inc has shown variability over the past five years. The ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue.

In 2023, the working capital turnover ratio increased to 1.35 from 1.17 in 2022, reflecting an improvement in Tandem Diabetes Care's ability to generate sales revenue relative to its working capital. This suggests that the company was able to utilize its working capital more effectively to support its operations and sales activities in 2023.

Comparing 2023 to prior years, we observe a generally increasing trend in the working capital turnover ratio from 0.94 in 2020 to 1.35 in 2023. This trend indicates that Tandem Diabetes Care has been gradually improving its efficiency in utilizing its working capital to drive sales over the years, except for the decline from 2019 to 2020.

While a higher working capital turnover ratio generally indicates better efficiency, it is important to also consider industry benchmarks and specific business contexts to gain a more holistic understanding of the company's performance in managing its working capital effectively. Overall, the increasing trend in Tandem Diabetes Care's working capital turnover ratio suggests a positive trend in the company's operational efficiency and sales generation capabilities.