Avanos Medical Inc (AVNS)

Working capital turnover

Dec 31, 2024 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
Revenue (ttm) US$ in thousands 687,800 681,500 682,400 680,100 705,700 749,900 780,700 814,300 820,000 795,900 777,900 761,300 744,600 736,200 737,800 715,100 714,800 719,600 705,300 713,800
Total current assets US$ in thousands 393,400 472,600 474,100 467,800 487,000 524,600 506,900 453,800 499,800 470,000 437,100 439,200 418,600 405,000 443,500 447,900 467,200 567,600 517,100 524,100
Total current liabilities US$ in thousands 165,900 212,900 208,200 205,200 234,600 170,700 160,500 158,500 185,800 162,300 151,100 152,900 139,200 129,200 158,300 154,600 166,300 179,400 176,000 189,400
Working capital turnover 3.02 2.62 2.57 2.59 2.80 2.12 2.25 2.76 2.61 2.59 2.72 2.66 2.66 2.67 2.59 2.44 2.38 1.85 2.07 2.13

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $687,800K ÷ ($393,400K – $165,900K)
= 3.02

The working capital turnover for Avanos Medical Inc has fluctuated over the years, ranging from a low of 1.85 in September 30, 2020, to a high of 3.02 in December 31, 2024. This ratio measures the efficiency with which the company is utilizing its working capital to generate sales revenue. A higher turnover ratio indicates that the company is effectively managing its working capital to support its operations and sales activities.

In the recent periods, Avanos Medical Inc has shown an improving trend in its working capital turnover, reaching 2.76 in March 31, 2023, and further increasing to 3.02 in December 31, 2024. This suggests that the company is becoming more efficient in its working capital management, potentially freeing up cash for other investments or reducing the need for external financing.

It is essential for the company to monitor this ratio regularly to ensure that working capital is being utilized optimally to support the business activities and maximize profitability. Overall, the increasing trend in the working capital turnover ratio is a positive indication of Avanos Medical Inc's operational efficiency and financial health.