Encompass Health Corp (EHC)
Activity ratios
Short-term
Turnover ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | — | — | — | — | — | 5.15 | 5.78 | 6.17 | 6.77 | 4.84 | 3.06 | 3.50 | 3.22 | 2.72 | 3.17 | 3.32 | 3.07 | 3.36 | 3.23 | 3.06 |
| Receivables turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Payables turnover | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Working capital turnover | 117.06 | 142.88 | 20.82 | 19.87 | 25.90 | 26.89 | 27.07 | 27.82 | 34.61 | 39.29 | 26.74 | 26.77 | 29.67 | 43.29 | 89.53 | 24.84 | 20.08 | 9.38 | 10.52 | 23.51 |
Encompass Health Corp's inventory turnover ratio fluctuated over the past years, ranging from a low of 2.72 in September 2021 to a high of 6.77 in December 2022. The inventory turnover improved in the later years, reaching 5.15 by September 2023. This indicates that the company's efficiency in managing its inventory improved over the period, with a higher turnover ratio suggesting that the company is selling its inventory more frequently.
The receivables turnover ratio data is not provided, indicating that we do not have information on how quickly the company is collecting its receivables from customers. A higher receivables turnover ratio would indicate that the company is efficient in collecting payments from its customers.
Similarly, information on payables turnover ratio is not available, which could have provided insights into how quickly the company is paying its suppliers.
The working capital turnover ratio varied significantly, with a peak of 142.88 in September 2024, indicating a high level of sales relative to the working capital available. This could suggest that the company is effectively utilizing its working capital to generate sales revenue. Overall, an increasing trend in working capital turnover ratio is favorable, as it indicates better utilization of resources to generate sales.
In conclusion, the analysis of Encompass Health Corp's activity ratios suggests improvements in inventory turnover and working capital turnover over the years, but a lack of data on receivables and payables turnover limits the comprehensive assessment of the company's overall efficiency in managing its working capital and operational activities.
Average number of days
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | 70.92 | 63.20 | 59.17 | 53.92 | 75.49 | 119.47 | 104.29 | 113.53 | 133.96 | 115.11 | 109.84 | 119.06 | 108.74 | 112.86 | 119.28 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
Based on the activity ratios provided for Encompass Health Corp, we can analyze the days of inventory on hand (DOH) over the reporting periods. The DOH indicates the average number of days it takes for the company to sell its inventory.
Initially, in March 2020, Encompass Health had 119.28 days of inventory on hand, which decreased to 104.29 days by March 2022, reflecting a more efficient management of inventory levels. However, there was a significant spike in September 2022, with only 75.49 days, suggesting a possible decrease in sales or issues with inventory management. The DOH decreased further to 53.92 days by December 2022, indicating a swift reduction in inventory levels.
Moreover, Encompass Health experienced fluctuations in DOH over subsequent periods, with a slight increase to 63.20 days in June 2023. By September 2023, the DOH increased to 70.92 days, showing a potential slowdown in inventory turnover. Unfortunately, the data for December 2023 and beyond is unavailable, making it difficult to assess the trend accurately beyond that period.
In conclusion, Encompass Health Corp has shown fluctuations in its days of inventory on hand, with periods of decreased efficiency followed by improvements. Monitoring this ratio is crucial to manage inventory effectively and optimize working capital.
Long-term
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | — | — | — | — | — | 1.39 | 1.40 | 1.47 | 1.55 | 1.69 | 1.77 | 1.80 | 1.80 | 1.85 | 1.86 | 1.86 | 1.89 | 2.20 | 2.25 | 2.33 |
| Total asset turnover | 0.82 | 0.81 | 0.79 | 0.80 | 0.79 | 0.79 | 0.78 | 0.82 | 0.87 | 0.93 | 0.74 | 0.75 | 0.75 | 0.75 | 0.74 | 0.72 | 0.72 | 0.70 | 0.71 | 0.76 |
The fixed asset turnover ratio of Encompass Health Corp has shown a declining trend over the years, indicating a decrease in the company's ability to generate revenue from its fixed assets efficiently. This ratio decreased from 2.33 in March 2020 to 1.40 in June 2023 before stabilizing around 1.40 - 1.50 range in subsequent periods, signaling a potential issue with asset utilization.
On the other hand, the total asset turnover ratio reflects a fluctuating pattern with some volatility. It decreased from 0.76 in March 2020 to 0.70 in September 2020, indicating a decline in the overall efficiency of the company in generating revenue from its total assets. However, there was a notable increase in the ratio to 0.93 in September 2022, suggesting an improvement in asset utilization efficiency in that period.
In conclusion, Encompass Health Corp's long-term activity ratios reveal mixed performance in utilizing both fixed and total assets to generate sales over the specified periods. The declining trend in fixed asset turnover and the fluctuating pattern in total asset turnover highlight the importance of closely monitoring asset utilization efficiency to maintain sustainable growth and profitability.