Addus HomeCare Corporation (ADUS)

Short-term

Turnover ratios

Based on the provided data, I will analyze the activity ratios of Addus HomeCare Corporation:

1. Inventory Turnover: The inventory turnover ratio for Addus HomeCare is not available, as indicated by "—". This could imply that the company may not hold significant levels of inventory in its operations, or the data may not be disclosed for these periods.

2. Receivables Turnover: The receivables turnover ratio measures how efficiently a company collects its outstanding receivables during a period. Addus HomeCare's receivables turnover has shown an increasing trend from 5.73 in 2020 to 9.44 in 2024. This implies that the company has been able to convert its accounts receivables into cash more effectively over the years.

3. Payables Turnover: The payables turnover ratio reflects how many times a company pays its suppliers during a period. Addus HomeCare's payables turnover has fluctuated over the years but has generally been consistent, ranging from 30.38 in 2020 to 38.97 in 2024. A higher payables turnover ratio indicates that the company is efficiently managing its accounts payables.

4. Working Capital Turnover: The working capital turnover ratio assesses how effectively a company utilizes its working capital to generate sales revenue. Addus HomeCare's working capital turnover has varied significantly, from 4.16 in 2021 to 19.16 in 2023. This indicates that the company has been able to leverage its working capital more efficiently in generating sales during these periods.

In summary, Addus HomeCare has shown improvements in its receivables turnover and working capital turnover ratios, indicating better efficiency in collections and working capital utilization. The payables turnover ratio has been relatively stable, reflecting consistent management of accounts payables. The lack of inventory turnover data suggests the company may not heavily rely on inventory in its operations.

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Average number of days

The analysis of Addus HomeCare Corporation's activity ratios based on the provided data reveals the following:

1. Days of Inventory on Hand (DOH): The data does not provide specific information on Addus HomeCare Corporation's inventory turnover, as the value for DOH is indicated as "— days" for all the years from 2020 to 2024. This lack of information makes it challenging to assess the efficiency of managing inventory.

2. Days of Sales Outstanding (DSO): The Days of Sales Outstanding metric shows a decreasing trend over the years, indicating an improvement in the collection of accounts receivable. The DSO decreased from 63.75 days in 2020 to 38.64 days by the end of 2024. This suggests that Addus HomeCare Corporation is collecting payments from customers at a quicker pace, which is a positive sign for liquidity and cash flow management.

3. Number of Days of Payables: The analysis of the Number of Days of Payables shows a relatively stable trend over the years. The number of days of payables decreased from 12.01 days in 2020 to 9.37 days by the end of 2024. This indicates that the company is taking slightly longer to settle its payables, which could potentially be beneficial for cash flow management as it allows for more time to use funds before paying suppliers.

In summary, while the specific inventory turnover ratio is unavailable, the decreasing trend in Days of Sales Outstanding and the stable trend in the Number of Days of Payables suggest that Addus HomeCare Corporation has improved its accounts receivable collection efficiency and maintained a stable payable period, which can positively impact its cash flow management and overall working capital position.

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Long-term

The fixed asset turnover ratio measures how efficiently a company is generating revenue from its fixed assets. In the case of Addus HomeCare Corporation, we see a steady improvement in the fixed asset turnover ratio over the years. It increased from 38.61 in 2020 to 46.98 in 2024, indicating that the company is generating more revenue relative to its investment in fixed assets.

On the other hand, the total asset turnover ratio measures how efficiently a company is utilizing all its assets to generate revenue. Addus HomeCare Corporation's total asset turnover ratio fluctuated over the years but showed an overall increase from 0.85 in 2020 to 1.03 in 2023 before dropping to 0.82 in 2024. This suggests that the company may have experienced changes in its asset utilization efficiency during these periods.

Overall, the increasing trend in the fixed asset turnover ratio indicates that Addus HomeCare Corporation has been improving its efficiency in generating revenue from its fixed assets. However, the fluctuation in the total asset turnover ratio implies some variability in the company's overall asset utilization efficiency, which may warrant further investigation to understand the underlying reasons for the changes.