Enhabit Inc. (EHAB)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate revenue.

1. Inventory turnover: The inventory turnover ratio measures how many times a company sells and replaces its inventory during a period. Enhabit Inc. experienced a significant decrease in inventory turnover from June 2023 to March 2023, suggesting a slowdown in inventory movement during this time. The absence of data for December 2023 may require further investigation to understand the trend for the full year.

2. Receivables turnover: This ratio indicates how efficiently a company collects its outstanding accounts receivable. Enhabit Inc. managed to maintain a relatively stable receivables turnover ratio across the four quarters in 2023, ranging from 5.92 to 6.74. This indicates that Enhabit is efficiently collecting payments from its customers.

3. Payables turnover: The payables turnover ratio reflects how quickly a company pays its suppliers. Enhabit Inc. demonstrated a consistent pattern of paying its suppliers relatively quickly throughout 2023, with the highest turnover in June. This may signify good relationships with suppliers or effective working capital management.

4. Working capital turnover: This ratio measures how effectively a company utilizes its working capital to generate sales revenue. Enhabit Inc. maintained a relatively stable working capital turnover around 13.5 throughout the year, indicating consistent efficiency in its working capital management practices.

Overall, Enhabit Inc. appears to manage its assets and liabilities effectively to support its operational activities based on the activity ratios analyzed. Further investigation and comparison with industry benchmarks may provide additional insights into the company's performance.

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Average number of days

Based on the activity ratios of Enhabit Inc. for the past four quarters, we can observe the following trends:

1. Days of Inventory on Hand (DOH):
- The company did not report any data for this ratio on December 31, 2023, suggesting a potential issue with tracking or reporting inventory levels.
- In the subsequent quarters, the DOH ranged from 0.64 days to 1.44 days, indicating that the company is efficiently managing its inventories by quickly converting them into sales.

2. Days of Sales Outstanding (DSO):
- DSO remained relatively stable over the quarters, ranging from 54.14 days to 61.67 days. This suggests that Enhabit's credit and collection policies have been consistent, resulting in a steady collection of accounts receivables.

3. Number of Days of Payables:
- The number of days of payables varied between 1.66 days and 2.55 days across the quarters. The lower values indicate that the company is paying its suppliers relatively quickly, which could be beneficial in maintaining good relationships with vendors.

Overall, Enhabit Inc. appears to have efficient inventory management practices and a consistent approach to accounts receivable collection. The company's prompt payment to suppliers also indicates financial stability and a proactive approach to managing working capital.

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Long-term

The fixed asset turnover ratio for Enhabit Inc. has shown a fluctuating trend over the four quarters of the year 2023, with values ranging from 97.98 to 110.23. This indicates that the company generated varying levels of sales revenue relative to its investment in fixed assets during different periods.

In contrast, the total asset turnover ratio has remained relatively stable around 0.70 to 0.72, implying that the company produced a consistent amount of sales revenue in relation to its total assets throughout the year.

Overall, the fixed asset turnover ratio provides insight into how efficiently Enhabit Inc. is utilizing its fixed assets to generate sales, while the total asset turnover ratio indicates the company’s overall efficiency in generating revenue from all its assets. It would be advantageous for the company to further analyze these ratios in conjunction with other financial metrics to gain a more comprehensive understanding of its long-term activity performance.