Alkermes Plc (ALKS)

Working capital turnover

		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	Dec 31, 2019
Revenue (ttm)	US$ in thousands	1,492,589	1,489,378	1,701,960	1,639,873	1,569,557	1,443,430	1,105,567	1,099,455	1,120,608	1,163,507	1,190,967	1,162,061	1,120,829	1,092,326	1,036,423	1,032,497	1,160,605	1,149,262	1,180,207	1,156,446
Total current assets	US$ in thousands	1,564,180	1,542,190	1,468,820	1,485,510	1,464,780	1,397,350	1,110,060	1,130,310	1,053,800	1,045,990	1,014,830	1,062,170	1,053,010	1,037,760	1,006,010	1,110,970	1,024,940	947,359	912,584	961,970
Total current liabilities	US$ in thousands	453,705	515,549	458,977	520,220	503,107	487,185	492,910	497,742	469,555	438,518	462,361	471,286	452,984	383,442	365,842	438,258	378,151	321,414	339,849	391,112
Working capital turnover		1.34	1.45	1.69	1.70	1.63	1.59	1.79	1.74	1.92	1.92	2.16	1.97	1.87	1.67	1.62	1.53	1.79	1.84	2.06	2.03

September 30, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,492,589K ÷ ($1,564,180K – $453,705K)
= 1.34

The working capital turnover of Alkermes Plc has shown fluctuations over the past five years, ranging from a low of 1.45 to a high of 2.16. This ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue.

In general, a higher working capital turnover ratio is preferred as it suggests that the company is efficiently using its current assets to support its operations. The trend for Alkermes Plc shows a gradual increase in the working capital turnover ratio, peaking at 2.16 in the second quarter of 2022 before slightly declining in recent periods.

The increasing trend in the working capital turnover ratio indicates that Alkermes Plc has been more effective in managing its working capital in recent years. This can be attributed to improved inventory management, accounts receivable collection, and overall efficiency in the company's operating cycle.

However, it is essential to monitor the working capital turnover ratio closely to ensure that the company continues to efficiently utilize its working capital to drive sales growth. Fluctuations in this ratio could indicate changing business conditions, shifts in customer payment behavior, or adjustments in inventory management strategies.