HCA Holdings Inc (HCA)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 14.84 | 13.67 | 13.77 | 12.05 | 12.99 |
| Receivables turnover | 6.52 | 6.77 | 7.26 | 7.31 | 6.96 |
| Payables turnover | 7.08 | 6.67 | 6.65 | 6.90 | 8.27 |
| Working capital turnover | 28.60 | 16.10 | 14.84 | 14.20 | 14.93 |
The activity ratios for HCA Healthcare Inc indicate the efficiency with which the company manages its assets and liabilities to generate sales.
1. Inventory turnover: The company's inventory turnover ratio has consistently been reported as 0.00 across the years, suggesting that HCA Healthcare Inc does not hold significant amounts of inventory relative to its sales. This could indicate that the company follows a just-in-time inventory management strategy.
2. Receivables turnover: HCA Healthcare Inc's receivables turnover ratio has ranged between 6.52 and 7.31 over the past five years. This indicates that the company is efficient in collecting payments from customers, with a higher turnover ratio reflecting a faster collection of receivables.
3. Payables turnover: The payables turnover ratio for HCA Healthcare Inc has consistently been reported as 0.00, suggesting that the company does not rely significantly on trade credit from suppliers to finance its operations.
4. Working capital turnover: The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. HCA Healthcare Inc has shown an increasing trend in this ratio from 14.20 in 2020 to 28.60 in 2023. This indicates that the company is effectively using its working capital to drive revenue growth.
Overall, the activity ratios suggest that HCA Healthcare Inc efficiently manages its accounts receivable and working capital to support its sales activities. The low inventory turnover and payables turnover ratios indicate a strategic approach to managing inventory levels and supplier payments. The increasing trend in the working capital turnover ratio reflects improving operational efficiency in utilizing its working capital to drive revenue growth over the years.
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 | 24.60 | 26.70 | 26.51 | 30.30 | 28.09 |
| Days of sales outstanding (DSO) | days | 55.95 | 53.88 | 50.29 | 49.94 | 52.47 |
| Number of days of payables | days | 51.53 | 54.73 | 54.89 | 52.89 | 44.14 |
To begin with, let's analyze the days of sales outstanding (DSO) for HCA Healthcare Inc over the past five years. DSO measures the average number of days it takes for the company to collect revenue after a sale is made. In this case, we observe a fluctuating trend, with DSO increasing from 52.47 days in 2019 to 55.95 days in 2023. This suggests that the company may be taking slightly longer to collect revenue from its customers in recent years, which could indicate potential delays in receivables turnover.
Next, looking at the days of inventory on hand (DOH), it is notable that specific data points are missing for all five years. However, this ratio typically reflects how efficiently a company manages its inventory levels. Without the exact figures, it is challenging to assess how well HCA Healthcare Inc is managing its inventory turnover and storage costs over this period.
Lastly, the number of days of payables is not provided, limiting our ability to analyze the company's payment practices and ability to manage its trade credit effectively. This ratio is crucial in understanding how long it takes for a company to pay its suppliers, impacting its liquidity and relationships with vendors.
Overall, while we can see a trend in the days of sales outstanding for HCA Healthcare Inc, the missing data for inventory and payables metrics hinders a comprehensive evaluation of the company's overall activity ratios. It would be beneficial to have the complete set of data to derive more insightful conclusions regarding the company's operational efficiency and cash flow management.
See also:
HCA Holdings Inc Short-term (Operating) Activity Ratios
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 2.34 | 2.36 | 2.44 | 2.22 | 2.26 |
| Total asset turnover | 1.16 | 1.15 | 1.16 | 1.09 | 1.14 |
Long-term activity ratios provide insights into how efficiently a company like HCA Healthcare Inc is managing its fixed and total assets to generate revenue.
The fixed asset turnover ratio for HCA Healthcare Inc has shown a slightly decreasing trend from 2.26 in 2019 to 2.34 in 2023. This ratio indicates that for every dollar invested in fixed assets, the company is generating $2.34 in revenue in 2023. However, the decrease in this ratio over the years suggests a slight decline in efficiency in utilizing fixed assets to generate sales.
On the other hand, the total asset turnover ratio for HCA Healthcare Inc has remained relatively stable around 1.14 to 1.16 from 2019 to 2023. This ratio reflects that for every dollar invested in total assets, the company is generating revenue of $1.16 in 2023. The stability in this ratio indicates that the company has been able to effectively utilize its total assets to generate sales consistently over the years.
In conclusion, while the fixed asset turnover ratio has shown a slight decrease, the total asset turnover ratio has remained steady for HCA Healthcare Inc. It suggests that the company has been able to efficiently utilize its total assets to generate revenue, although there may be opportunities to enhance the utilization of fixed assets for revenue generation.