The Ensign Group Inc (ENSG)

Short-term

Turnover ratios

Inventory turnover data is not provided in the table, so we cannot analyze that ratio.

Receivables turnover has shown a consistent trend of improvement over the past five years, indicating that Ensign Group Inc has been efficient in collecting payments from customers. A higher ratio suggests that the company is able to collect its outstanding receivables more quickly.

Payables turnover has also exhibited a consistent trend of improvement over the same period, showing that the company is taking longer to pay its suppliers. A higher payables turnover ratio may indicate that the company is managing its payables effectively or negotiating better credit terms with suppliers.

Working capital turnover has been fluctuating over the past five years, with significant volatility. The drastic decrease in 2020 followed by a substantial increase in 2021 could be attributed to changes in company operations or financial management strategies. A higher working capital turnover ratio generally indicates that the company is effectively utilizing its working capital to generate sales.

Overall, while the receivables and payables turnover ratios suggest positive trends in managing receivables and payables, respectively, the working capital turnover ratio has shown significant fluctuations, which may warrant further investigation into the company's operational efficiency and financial management practices.

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Average number of days

Days of inventory on hand (DOH) is not provided in the data table.

Days of sales outstanding (DSO) decreased from 49.27 days in 2022 to 47.47 days in 2023, indicating that Ensign Group Inc collected its receivables more efficiently in 2023.

Number of days of payables increased from 11.95 days in 2022 to 11.52 days in 2023, which suggests that Ensign Group Inc took a slightly longer time to pay its suppliers in 2023.

Overall, the improvement in DSO and slight increase in days of payables suggest that Ensign Group Inc managed its working capital better in 2023 compared to the previous year, efficiently converting its sales into cash while maintaining reasonable payment terms with its suppliers.

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Long-term

The long-term activity ratios of Ensign Group Inc, as indicated by the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in generating sales from its assets over the past five years.

The fixed asset turnover, which measures the company's ability to generate sales from its fixed assets, has shown a generally increasing trend from 2.65 in 2019 to 3.42 in 2023. This indicates that Ensign Group Inc has been utilizing its fixed assets more effectively to generate revenue over the years. A higher fixed asset turnover ratio suggests that the company is efficiently utilizing its investment in fixed assets to generate sales.

On the other hand, the total asset turnover, which reflects the company's ability to generate sales from all its assets, has fluctuated slightly over the years, ranging from 0.86 in 2019 to 0.92 in 2021. This ratio dipped slightly to 0.89 in 2023. While the ratio may not show a consistent upward trend, Ensign Group Inc has maintained a relatively stable performance in generating sales from its total assets.

Overall, the increasing trend in fixed asset turnover suggests that Ensign Group Inc is becoming more efficient in utilizing its fixed assets to drive sales, which is a positive indicator of operational efficiency. However, the fluctuating total asset turnover indicates that the company's ability to generate sales from all its assets may need further examination to ensure sustainable growth and profitability.