Encompass Health Corp (EHC)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,661,000 | 4,174,400 | 4,959,100 | 4,461,100 | 4,440,800 |
| Total current assets | US$ in thousands | 841,800 | 717,200 | 921,400 | 948,600 | 755,800 |
| Total current liabilities | US$ in thousands | 656,400 | 575,900 | 748,800 | 717,300 | 721,000 |
| Working capital turnover | 25.14 | 29.54 | 28.73 | 19.29 | 127.61 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,661,000K ÷ ($841,800K – $656,400K)
= 25.14
The working capital turnover ratio for Encompass Health Corp has fluctuated over the past five years. In 2019, the ratio was significantly high at 132.33, indicating that the company was able to generate revenue 132.33 times for every dollar of working capital invested. This could be a result of efficient management of working capital or aggressive sales strategies.
Subsequently, the ratio declined in the following years, reaching a low of 20.08 in 2020. This could indicate a decrease in sales relative to the level of working capital, possibly due to economic challenges or operational inefficiencies.
In 2021 and 2022, the working capital turnover ratio improved to 29.67 and 30.78, respectively, suggesting that the company managed to enhance its revenue generation efficiency compared to the prior year.
However, in 2023, the ratio saw a slight decrease to 25.90. Although this is lower than the previous year, it is still higher compared to 2020 and indicates that Encompass Health Corp continues to effectively utilize its working capital to generate revenue, albeit at a slightly slower pace compared to the preceding year.
Peer comparison
Dec 31, 2023