Centene Corp (CNC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 38.12 | 86.87 | 46.11 | 61.46 | 10.10 |
Based on the given data for Centene Corp.'s activity ratios:
1. Receivables Turnover:
- The receivables turnover ratio measures how effectively the company is collecting its accounts receivable during a specific period.
- Centene Corp.'s receivables turnover has been fluctuating over the past five years, with a peak of 11.95 in 2019 and a low of 9.91 in 2023.
- The declining trend in receivables turnover may indicate that it took the company longer to collect its receivables in 2023 compared to previous years. However, a higher turnover is generally favorable as it indicates quicker cash conversion from sales.
2. Working Capital Turnover:
- The working capital turnover ratio measures how effectively the company utilizes its working capital to generate sales revenue.
- Centene Corp.'s working capital turnover has also varied significantly over the past five years, with a notable increase from 10.10 in 2019 to 38.12 in 2023.
- The substantial increase in working capital turnover from 2019 to 2023 suggests that the company has been more efficient in utilizing its working capital to generate sales revenue in the most recent year.
- A higher working capital turnover ratio is generally positive as it indicates efficient use of working capital to support revenue generation.
3. Inventory Turnover and Payables Turnover:
- Unfortunately, specific data for inventory turnover and payables turnover are not provided in the table, making it difficult to assess Centene Corp.'s efficiency in managing its inventory and payments to suppliers.
- Inventory turnover ratio would typically indicate how quickly the company sells its inventory, while payables turnover ratio would show how effectively it manages its payments to suppliers.
- To gain a more comprehensive understanding of Centene Corp.'s overall efficiency in managing its supply chain and cash flow, it would be beneficial to analyze these ratios in conjunction with the receivables turnover and working capital turnover ratios.
In summary, analyzing activity ratios such as receivables turnover and working capital turnover provides insights into Centene Corp.'s efficiency in managing receivables and working capital to drive sales revenue. The fluctuating trends observed in these ratios highlight the company's changing operational efficiency over the past five years.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The Days of Sales Outstanding (DSO) ratio measures how long it takes for Centene Corp. to collect payments from its customers after a sale. From 2019 to 2023, there has been a gradual increase in DSO, indicating that the company is taking longer to convert its accounts receivable into cash. This may suggest potential issues with the company's credit policies or collection efficiency.
For Days of Inventory on Hand (DOH), the data provided is missing. DOH is a measure of how effectively Centene manages its inventory levels. Without this data, it is challenging to assess the company's inventory turnover and efficiency in managing its inventory.
The Number of Days of Payables ratio, which is not provided in the table, would help evaluate how long Centene takes to pay its suppliers. A longer payables period can indicate that the company is effectively managing its cash flow by extending payment terms, but it could also indicate potential liquidity issues or strained supplier relationships if excessively long.
In conclusion, the analysis of Centene Corp.'s activity ratios reveals a need for further information on inventory management and payables to provide a more comprehensive assessment of the company's operational efficiency and financial health.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 76.27 | 59.44 | 37.15 | 40.06 | 35.19 |
| Total asset turnover | 1.82 | 1.88 | 1.61 | 1.62 | 1.82 |
The fixed asset turnover ratio for Centene Corp. has been showing an increasing trend over the past five years, suggesting that the company has been more efficient in generating sales relative to its investment in fixed assets. This indicates that Centene has been able to generate more revenue per dollar invested in fixed assets each year.
On the other hand, the total asset turnover ratio has fluctuated slightly over the same period, with a slight decrease from 2022 to 2023. This indicates the company's ability to generate sales from all its assets has remained relatively stable, with a moderate decline in 2023.
Overall, while the fixed asset turnover ratio shows an improving trend, the total asset turnover ratio indicates stability in Centene's ability to generate sales from all its assets. These ratios reflect the company's operational efficiency in utilizing its fixed and total assets to drive revenue generation.