Amphastar P (AMPH)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	644,395	498,987	437,768	349,846	322,357
Total current assets	US$ in thousands	489,600	378,319	318,119	279,682	255,241
Total current liabilities	US$ in thousands	225,407	94,862	103,810	112,201	90,009
Working capital turnover		2.44	1.76	2.04	2.09	1.95

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $644,395K ÷ ($489,600K – $225,407K)
= 2.44

The working capital turnover ratio measures how efficiently Amphastar Pharmaceuticals Inc is utilizing its working capital to generate sales revenue. A higher ratio indicates that the company is effectively managing its working capital to support its operations and sales.

From the data provided in the table, we observe fluctuations in Amphastar Pharmaceuticals Inc's working capital turnover ratio over the past five years. The ratio has ranged from 1.76 to 2.44, showing variability in the company's ability to convert working capital into sales.

In 2023, the working capital turnover ratio improved significantly to 2.44, reflecting a more efficient utilization of working capital compared to previous years. This indicates that the company has been able to generate more sales revenue for each unit of working capital invested.

However, it is important to note that while a higher working capital turnover ratio is generally favorable, a very high ratio may indicate that the company is operating with insufficient working capital, which could lead to liquidity challenges.

Overall, the trend in Amphastar Pharmaceuticals Inc's working capital turnover ratio suggests fluctuations in the company's efficiency in managing its working capital to support its sales activities. Further analysis of the company's working capital management practices and operational strategies would provide more insights into the factors driving these fluctuations.