Amedisys Inc (AMED)

Short-term

Turnover ratios

Inventory turnover is not provided in the data table, but we can analyze the other activity ratios for Amedisys Inc.

1. Receivables Turnover:
Amedisys Inc.'s receivables turnover has been relatively consistent over the past five years, ranging from 7.14 to 8.23 times. This indicates that the company collects its accounts receivable approximately 7 to 8 times per year on average. A higher turnover ratio generally suggests that the company is efficient in collecting its receivables, which is positive for liquidity.

2. Payables Turnover:
The payables turnover ratio for Amedisys Inc. has varied over the years, with a notable increase from 2019 to 2020 and subsequent fluctuations. A high payables turnover ratio, such as in 2020 and 2021, could suggest that the company pays its suppliers more frequently, possibly taking advantage of discounts or managing its cash flow effectively. However, a very high turnover ratio may also indicate a potential strain on supplier relationships or cash management.

3. Working Capital Turnover:
The working capital turnover ratio measures how effectively a company utilizes its working capital to generate sales. Amedisys Inc.'s working capital turnover has been fluctuating, with a significant increase from 2019 to 2020 and further improvement in 2023. A higher turnover ratio indicates that the company generates more revenue with a lower amount of working capital, which could imply efficient asset management.

Overall, based on the activity ratios provided, Amedisys Inc. appears to have relatively efficient management of its receivables and working capital. However, the fluctuating nature of the payables turnover ratio warrants further investigation to understand the company's payment practices and relationships with suppliers.

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Average number of days

The Days of Sales Outstanding (DSO) measures how long it takes for Amedisys Inc. to collect revenue from its sales. Over the past five years, there has been a slight increase in the DSO from 44.35 days in 2019 to 51.15 days in 2023. This indicates that Amedisys is taking longer to collect revenues from its customers, which may suggest inefficiencies in the company's accounts receivable management.

The Number of Days of Payables measures how long Amedisys takes to pay its suppliers. Amedisys has shown fluctuating trends in this ratio over the past five years, with a decrease in the number of days of payables from 9.92 days in 2019 to 8.27 days in 2023. A lower number of days of payables suggests that the company is paying its suppliers more quickly, which could be a positive indicator of strong supplier relationships or efficient working capital management.

The Days of Inventory on Hand (DOH) ratio is not provided in the data table, which makes it challenging to analyze the efficiency of Amedisys' inventory management. This ratio would typically measure how long it takes for Amedisys to sell its inventory. A lower DOH would indicate that Amedisys is effectively managing its inventory levels, whereas a higher DOH would suggest potential issues with overstocking or slow-moving inventory.

Overall, analyzing these activity ratios collectively can provide insights into Amedisys' operational efficiency and management of working capital. Amedisys should focus on optimizing its accounts receivable collection process to reduce DSO and maintaining a balance between paying suppliers promptly while effectively managing inventory levels.

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Long-term

The long-term activity ratios of Amedisys Inc., as indicated by the fixed asset turnover and total asset turnover ratios, provide insights into the company's efficiency in generating sales in relation to its long-term assets.

The fixed asset turnover ratio has fluctuated over the past five years, with the highest ratio recorded in 2022 at 138.72 and the lowest in 2019 at 69.56. This ratio indicates that Amedisys has been able to generate significant revenue relative to its investments in fixed assets. The decreasing trend from 2022 to 2023 may suggest a potential decrease in the efficiency of utilizing fixed assets to generate sales.

On the other hand, the total asset turnover ratio has also shown a declining trend over the years, with the ratio decreasing from 1.55 in 2019 to 1.09 in 2023. This ratio illustrates the company's ability to generate revenue from all its assets, including both fixed and current assets. The decreasing trend in total asset turnover indicates a possible decrease in the overall efficiency of asset utilization to generate sales.

In conclusion, while Amedisys Inc. has demonstrated a strong ability to generate sales in relation to its fixed assets, there are indications of declining efficiency in utilizing total assets to generate revenue. It is essential for the company to closely monitor and optimize its asset utilization to improve long-term operational efficiency and profitability.