Quest Diagnostics Incorporated (DGX)
Working capital turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 9,872,000 | 9,252,000 | 9,883,000 | 10,788,000 | 9,437,000 |
| Total current assets | US$ in thousands | 2,392,000 | 2,372,000 | 1,898,000 | 2,741,000 | 3,058,000 |
| Total current liabilities | US$ in thousands | 2,169,000 | 1,815,000 | 1,551,000 | 1,753,000 | 1,776,000 |
| Working capital turnover | 44.27 | 16.61 | 28.48 | 10.92 | 7.36 |
December 31, 2024 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $9,872,000K ÷ ($2,392,000K – $2,169,000K)
= 44.27
Working capital turnover measures how efficiently a company is utilizing its working capital to generate sales revenue. In the case of Quest Diagnostics Incorporated, the working capital turnover has shown substantial improvement over the years, from 7.36 in 2020 to 44.27 in 2024.
This indicates that Quest Diagnostics has been able to generate significantly more sales revenue relative to its working capital investment. A higher working capital turnover ratio is generally favorable as it suggests that the company is effectively managing its operating cycle and turning its current assets into sales more frequently.
The notable increase in the working capital turnover ratio for Quest Diagnostics reflects improved efficiency in utilizing its short-term assets and liabilities to support its sales activities. This enhanced efficiency may be attributed to better inventory management, accounts receivable collection, and accounts payable terms.
Overall, the increasing trend in Quest Diagnostics' working capital turnover ratio signals operational efficiency and effective management of working capital resources, which is a positive indicator for the company's financial performance and sustainability.
Peer comparison
Dec 31, 2024