Addus HomeCare Corporation (ADUS)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,051,790	943,505	859,640	762,533	647,209
Total current assets	US$ in thousands	200,004	222,807	324,341	287,697	269,387
Total current liabilities	US$ in thousands	145,117	131,146	117,689	143,901	87,528
Working capital turnover		19.16	10.29	4.16	5.30	3.56

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,051,790K ÷ ($200,004K – $145,117K)
= 19.16

Addus HomeCare Corporation's working capital turnover has shown a positive trend over the past five years, indicating an improvement in the efficiency of utilizing its working capital. The working capital turnover ratio has significantly increased from 3.57 in 2019 to 19.29 in 2023, suggesting that the company is generating revenue more efficiently relative to its working capital.

This upward trend signifies that Addus HomeCare Corporation has been able to effectively manage its current assets and liabilities to support its operations and facilitate revenue generation. A higher working capital turnover ratio generally indicates that the company is able to generate more sales with the same level of working capital, which is a positive sign of operational efficiency and liquidity management.

The substantial improvement in the working capital turnover ratio from 2019 to 2023 reflects the company's ability to optimize its working capital position, enhance its cash conversion cycle, and potentially improve profitability. Overall, the increasing trend in working capital turnover for Addus HomeCare Corporation demonstrates better utilization of resources and operational effectiveness in converting working capital into revenue.