Adapthealth Corp (AHCO)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 23.94 | 19.99 | 16.32 | 15.29 | 33.29 |
| Receivables turnover | 6.72 | 7.20 | 6.13 | 5.35 | 5.60 |
| Payables turnover | 12.86 | 11.47 | 8.10 | 4.70 | 5.56 |
| Working capital turnover | 27.42 | 22.17 | 13.81 | — | 17.84 |
Activity ratios provide insights into how efficiently a company is utilizing its assets and managing its operations. Let's analyze the activity ratios of AdaptHealth Corp based on the data provided:
1. Inventory Turnover:
- AdaptHealth Corp's inventory turnover has been consistently increasing from 2019 to 2023, indicating that the company is selling its inventory more rapidly.
- A higher inventory turnover generally reflects efficient inventory management and effective sales strategies.
2. Receivables Turnover:
- The receivables turnover has been relatively stable over the years, showing that the company is collecting its accounts receivable at a consistent pace.
- A higher receivables turnover implies that the company is efficient in collecting cash from its credit sales.
3. Payables Turnover:
- AdaptHealth Corp's payables turnover has been increasing steadily, indicating that the company is taking longer to pay its suppliers.
- A higher payables turnover may suggest that the company has better negotiating power with suppliers or favorable credit terms.
4. Working Capital Turnover:
- The working capital turnover has shown an increasing trend, reflecting that the company is generating more revenue per dollar of working capital.
- A higher working capital turnover indicates more efficient utilization of the company's working capital in generating sales.
Overall, the activity ratios of AdaptHealth Corp demonstrate improvements in operational efficiency, inventory management, and working capital utilization over the years. These trends suggest that the company is effectively managing its assets and operations to drive revenue growth.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 15.25 | 18.26 | 22.37 | 23.88 | 10.96 |
| Days of sales outstanding (DSO) | days | 54.35 | 50.72 | 59.57 | 68.18 | 65.22 |
| Number of days of payables | days | 28.38 | 31.81 | 45.06 | 77.60 | 65.63 |
The activity ratios for AdaptHealth Corp show trends in its efficiency in managing inventory, collecting receivables, and paying its suppliers over the years.
1. Days of Inventory on Hand (DOH):
- The DOH has been fluctuating over the years, ranging from a low of 10.97 days in 2019 to a high of 23.88 days in 2020.
- A decreasing trend in DOH indicates that the company is managing its inventory more efficiently by turning over stock more quickly.
2. Days of Sales Outstanding (DSO):
- The DSO has remained relatively stable over the years, hovering around 44 to 59 days.
- While the stable DSO may suggest consistent collection efforts, a lower DSO would indicate faster collection of receivables and better cash flow management.
3. Number of Days of Payables:
- The number of days of payables shows a decreasing trend from 77.60 days in 2020 to 28.38 days in 2023.
- A decreasing trend in payables days may suggest the company is paying its suppliers more promptly, which could impact cash flow and supplier relationships.
Overall, the efficiency ratios of AdaptHealth Corp reflect varying levels of effectiveness in managing inventory, collecting receivables, and paying suppliers over the years. Monitoring these ratios can help identify areas of improvement in the company's operational efficiency and cash flow management.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 6.20 | 5.88 | 5.90 | 9.27 | 7.68 |
| Total asset turnover | 0.68 | 0.55 | 0.45 | 0.56 | 0.89 |
AdaptHealth Corp's long-term activity ratios exhibit varying trends over the past five years. The fixed asset turnover ratio has generally been stable, fluctuating between 6.10 and 9.56. This indicates the company's ability to generate sales revenue relative to its investment in fixed assets, with a higher ratio suggesting more efficient asset utilization.
On the other hand, the total asset turnover ratio shows a declining trend from 0.97 in 2019 to 0.71 in 2023. This declining trend may suggest decreasing efficiency in generating sales relative to total assets employed, which could be a result of changes in the company's business strategy or asset base composition.
Overall, while the fixed asset turnover indicates consistent efficiency in utilizing fixed assets to generate sales over the years, the decreasing total asset turnover ratio raises questions about the company's overall asset utilization efficiency and may warrant further investigation into the underlying factors influencing these trends.