Vertex Pharmaceuticals Inc (VRTX)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	9,803,200	8,863,500	7,499,400	6,135,450	4,105,510
Total current assets	US$ in thousands	14,144,200	13,234,800	9,560,600	8,133,400	4,822,830
Total current liabilities	US$ in thousands	3,547,400	2,742,100	2,142,000	1,877,500	1,334,830
Working capital turnover		0.93	0.84	1.01	0.98	1.18

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $9,803,200K ÷ ($14,144,200K – $3,547,400K)
= 0.93

The working capital turnover for Vertex Pharmaceuticals, Inc. has been fluctuating 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 decreased to 0.93, compared to the previous year's ratio of 0.85. This suggests that the company generated slightly fewer sales revenue relative to its working capital in 2023.

However, when compared to 2021 and 2020, where the ratios were 1.02 and 0.99 respectively, the efficiency of utilizing working capital to generate sales revenue saw a decline in 2023.

The highest working capital turnover ratio was observed in 2019 at 1.19, which signifies that during that year, Vertex Pharmaceuticals, Inc. was able to generate the most sales revenue relative to its working capital.

Overall, it is important for the company to monitor and improve its working capital turnover ratio to ensure efficient utilization of its working capital in generating sales revenue.