The Ensign Group Inc (ENSG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | — | 541.66 | — | — |
| Receivables turnover | 7.48 | 7.67 | 7.41 | 7.99 | 7.88 |
| Payables turnover | 36.44 | 34.54 | 32.62 | 37.39 | 39.28 |
| Working capital turnover | 10.29 | 11.92 | 15.20 | 22.53 | 116.88 |
The Ensign Group Inc's activity ratios provide meaningful insights into its operational efficiency.
1. Inventory Turnover:
- The company experienced a significant increase in inventory turnover from 2022 to 2023, with a ratio of 541.66 in 2022. However, the ratios for 2020, 2021, and 2024 are not available. This could suggest that the company is managing its inventory more effectively in recent years.
2. Receivables Turnover:
- The receivables turnover remained relatively stable over the five-year period, ranging from 7.41 to 7.99. This indicates that the company is efficiently collecting payments from its customers, with a slight decline in 2022.
3. Payables Turnover:
- The payables turnover ratio decreased from 39.28 in 2020 to 36.44 in 2024. A declining payables turnover may suggest that the company is taking longer to pay its suppliers, which could be indicative of changing payment terms or cash flow challenges.
4. Working Capital Turnover:
- The working capital turnover ratio decreased consistently from 2020 to 2024, indicating a decline in the efficiency of the company's utilization of working capital. A lower ratio implies that the company is generating less revenue for each dollar of working capital invested.
In summary, while The Ensign Group Inc has shown improvements in inventory turnover and maintained stable receivables turnover, there are areas of concern such as a decreasing payables turnover and working capital turnover. These trends should be further analyzed to understand their impact on the company's overall operational efficiency and financial performance.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | 0.67 | — | — |
| Days of sales outstanding (DSO) | days | 48.83 | 47.57 | 49.27 | 45.67 | 46.34 |
| Number of days of payables | days | 10.02 | 10.57 | 11.19 | 9.76 | 9.29 |
The Ensign Group Inc's activity ratios show the following trends over the past five years:
1. Days of Inventory on Hand: The company had no inventory on hand as of December 31, 2022, which may indicate efficient inventory management practices. For the other years, the data is not available, so it is difficult to assess the trend in inventory turnover.
2. Days of Sales Outstanding (DSO): The days of sales outstanding have ranged from 45.67 days to 49.27 days over the period, suggesting that the company takes approximately 46 to 49 days to collect its accounts receivable. A lower DSO would indicate faster collection of receivables and better liquidity.
3. Number of Days of Payables: The number of days of payables has increased from 9.29 days in 2020 to 10.02 days in 2024. This indicates that the company is taking slightly longer to pay its suppliers, which could potentially improve cash flow but may also strain supplier relationships if extended too far.
Overall, while the information on inventory turnover is limited, the trends in days of sales outstanding and number of days of payables suggest that The Ensign Group Inc may be effective in managing its accounts receivable and payables, which can have implications for its liquidity and cash flow management. Keeping a close eye on these ratios can provide insights into the company's operational efficiency and working capital management.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 3.30 | 3.41 | 3.05 | 2.96 | 3.09 |
| Total asset turnover | 0.91 | 0.89 | 0.88 | 0.92 | 0.94 |
Fixed Asset Turnover:
- The fixed asset turnover ratio for The Ensign Group Inc has shown a slight decline from 3.09 in 2020 to 2.96 in 2021, before gradually increasing to 3.41 in 2023 and then decreasing slightly to 3.30 in 2024.
- This ratio measures how efficiently the company is generating revenue from its investment in fixed assets. A higher ratio indicates that the company is generating more revenue per dollar invested in fixed assets.
- The fluctuation in the fixed asset turnover ratio may indicate changes in the company's utilization of its fixed assets over the years. The increase in 2023 followed by a slight decline in 2024 could suggest improvements in asset efficiency, which were then slightly reduced in the following year.
Total Asset Turnover:
- The total asset turnover ratio for The Ensign Group Inc has shown a declining trend from 0.94 in 2020 to 0.91 in 2024, with a dip in 2022 to 0.88.
- This ratio indicates how efficiently the company is generating revenue from its total assets. A higher ratio implies that the company is generating more revenue per dollar of assets.
- The decreasing trend in the total asset turnover ratio suggests that the company is becoming less efficient in generating revenues from its total assets over the years. This could be due to factors such as slower revenue growth relative to asset growth or inefficient utilization of assets.
In conclusion, while The Ensign Group Inc has demonstrated fluctuations in its fixed asset turnover ratio, the declining trend in the total asset turnover ratio raises concerns about the company's overall efficiency in utilizing its assets to generate revenue. Further analysis and investigation into the factors influencing these ratios would be necessary to fully understand the company's long-term activity performance.