Vertex Pharmaceuticals Inc (VRTX)

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	10,984,000	10,582,900	10,283,600	10,120,000	9,803,200	9,596,700	9,444,700	9,144,300	8,863,500	8,628,770	8,277,080	7,873,370	7,499,400	7,066,960	6,622,470	6,355,190	6,147,530	5,935,020	5,347,582	4,763,428
Total current assets	US$ in thousands	9,596,400	9,804,100	8,941,600	13,288,700	14,144,200	14,695,800	13,872,900	12,965,700	13,234,800	12,271,000	11,503,500	10,361,300	9,560,600	8,852,540	8,457,510	8,539,310	8,133,400	7,458,460	6,694,320	5,446,400
Total current liabilities	US$ in thousands	3,564,600	3,973,100	3,547,200	3,795,900	3,547,400	3,599,400	3,352,100	3,026,200	2,742,100	2,609,300	2,556,200	2,180,200	2,142,000	1,914,260	1,836,450	1,944,050	1,877,500	2,004,030	1,798,640	1,538,750
Working capital turnover		1.82	1.81	1.91	1.07	0.93	0.86	0.90	0.92	0.84	0.89	0.93	0.96	1.01	1.02	1.00	0.96	0.98	1.09	1.09	1.22

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $10,984,000K ÷ ($9,596,400K – $3,564,600K)
= 1.82

Vertex Pharmaceuticals Inc's working capital turnover has exhibited fluctuations over the period analyzed. The ratio started at 1.22 on March 31, 2020, reflecting that the company generated $1.22 in revenue for every dollar of working capital invested. However, the ratio decreased to 0.84 by December 31, 2022 before gradually recovering. Notably, an increase in working capital turnover indicates an improvement in efficiency in utilizing working capital to generate revenue.

The ratio saw a significant improvement to 1.91 on June 30, 2024, suggesting that Vertex Pharmaceuticals Inc was able to generate $1.91 in revenue for each dollar of working capital invested, which could be due to better management of its working capital components such as current assets and current liabilities. Overall, analyzing the working capital turnover can provide insights into how effectively the company is utilizing its working capital to support its operations and generate revenue.