Alkermes Plc (ALKS)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,639,870	1,099,460	1,162,060	1,032,500	1,156,450
Total current assets	US$ in thousands	1,485,510	1,130,310	1,062,170	1,110,970	961,970
Total current liabilities	US$ in thousands	520,220	497,742	471,286	438,258	391,112
Working capital turnover		1.70	1.74	1.97	1.53	2.03

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,639,870K ÷ ($1,485,510K – $520,220K)
= 1.70

The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate revenue. It indicates how many times the company's working capital is being used to support sales during a specific period. A higher working capital turnover ratio generally suggests better efficiency in managing working capital.

Analyzing the working capital turnover ratio of Alkermes plc over the past five years reveals fluctuations in the efficiency of its working capital management. In 2023, the working capital turnover ratio decreased to 1.72 from 1.76 in 2022, indicating a slight decline in the company's ability to generate revenue relative to its working capital investment.

Comparing this with the trend over the previous years, the ratio peaked in 2021 at 1.99, suggesting that in that year, Alkermes plc was particularly effective in using its working capital to support sales. However, in 2020 and 2019, the working capital turnover ratios were 1.54 and 2.05, respectively, indicating fluctuations in the company's working capital efficiency over those years.

Overall, while the working capital turnover ratio of Alkermes plc has shown variability over the past five years, it is important for the company to monitor and manage its working capital effectively to ensure optimal utilization and efficiency in supporting its revenue generation activities.