Encompass Health Corp (EHC)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 82.60 | 48.84 | 44.86 | 50.78 |
| Receivables turnover | 7.62 | 7.78 | 9.61 | 7.79 | 8.77 |
| Payables turnover | 16.86 | 19.64 | 23.73 | 25.51 | 30.81 |
| Working capital turnover | 25.14 | 29.54 | 28.73 | 19.29 | 127.61 |
Inventory turnover data is not provided in the table, making it impossible to assess the company's efficiency in managing its inventory levels over the years.
Encompass Health Corp's receivables turnover has been relatively stable over the past five years, ranging from 7.53 to 9.10. This ratio indicates that the company is efficient in collecting payments from its customers, with a higher turnover ratio suggesting faster collection of receivables.
The payables turnover ratio is consistently reported as 0.00 across all years, indicating that there is no available data to analyze the company's efficiency in paying its suppliers.
The working capital turnover ratio has shown fluctuations over the years, with a significant decline in 2020 followed by a sharp increase in 2021. This ratio measures how efficiently the company is using its working capital to generate sales. Encompass Health Corp's working capital turnover has been relatively high, especially in 2019, indicating an efficient utilization of its working capital to generate sales revenue.
Overall, while the company's receivables turnover suggests efficient collection practices, the lack of data for inventory and payables turnover makes it challenging to provide a comprehensive analysis of Encompass Health Corp's activity ratios.
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 | — | 4.42 | 7.47 | 8.14 | 7.19 |
| Days of sales outstanding (DSO) | days | 47.89 | 46.94 | 37.96 | 46.87 | 41.60 |
| Number of days of payables | days | 21.65 | 18.58 | 15.38 | 14.31 | 11.85 |
Days of Sales Outstanding (DSO) measures how efficiently a company collects its accounts receivable. A lower DSO indicates that the company is collecting payments more quickly. Encompass Health Corp's DSO has fluctuated over the past five years, with a peak in 2021 at 48.48 days and a low in 2019 at 40.11 days. The DSO for 2023 is 46.50 days, showing a slight increase compared to 2022.
Days of Inventory on Hand (DOH) reflects how long it takes for a company to sell its inventory. Unfortunately, the data for Encompass Health Corp's DOH is missing for all five years, making it challenging to assess the efficiency in managing inventory levels.
Number of Days of Payables shows how long a company takes to pay its suppliers. However, this data point is missing for all years for Encompass Health Corp, preventing an evaluation of its payables management.
In summary, while we can observe the trend for DSO over the years, the lack of data for DOH and payables restricts a comprehensive analysis of Encompass Health Corp's activity ratios related to inventory and payables.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 1.53 | 1.57 | 2.17 | 2.37 | 2.27 |
| Total asset turnover | 0.76 | 0.74 | 0.72 | 0.69 | 0.73 |
The fixed asset turnover ratio for Encompass Health Corp has shown a decreasing trend over the past five years, declining from 2.35 in 2019 to 1.45 in 2023. This indicates that the company's ability to generate sales from its fixed assets has weakened over time.
On the other hand, the total asset turnover ratio for Encompass Health Corp has fluctuated during the same period, with a slight increase from 0.76 in 2019 to 0.79 in 2023. This suggests that the company's overall efficiency in generating sales from all its assets has improved slightly.
Overall, the declining trend in fixed asset turnover may indicate that Encompass Health Corp's fixed assets are not being utilized as effectively in generating sales, which could potentially lead to lower profitability in the long term. However, the slight improvement in total asset turnover implies that the company is managing its overall asset base more efficiently in terms of generating revenue.