Healthcare Services Group Inc (HCSG)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 88.41 | 77.53 | 61.22 | 52.15 | 48.39 |
| Receivables turnover | 4.34 | 4.92 | 5.43 | 6.89 | 5.39 |
| Payables turnover | 19.63 | 24.03 | 24.72 | 31.53 | 32.47 |
| Working capital turnover | 4.69 | 5.29 | 4.62 | 4.29 | 5.01 |
The activity ratios of Healthcare Services Group, Inc. provide insights into how efficiently the company manages its inventory, receivables, payables, and working capital.
1. Inventory Turnover:
- Healthcare Services Group, Inc. has shown a consistent improvement in inventory turnover over the years, indicating that the company is managing its inventory more efficiently. The sharp increase from 2019 to 2023 suggests that the company is selling its inventory at a faster rate.
2. Receivables Turnover:
- The receivables turnover ratio has been fluctuating over the years, with a noticeable decline from 2020 to 2021. However, the ratio increased in 2023 compared to the previous years, indicating that the company is collecting its receivables more effectively.
3. Payables Turnover:
- The payables turnover ratio has shown a downward trend since 2019, indicating that the company is taking longer to pay its suppliers. A lower payables turnover ratio may suggest that Healthcare Services Group, Inc. is utilizing its trade credit terms more effectively to manage its cash flow.
4. Working Capital Turnover:
- The working capital turnover ratio has fluctuated over the years but has generally remained within a relatively stable range. A higher turnover ratio indicates that the company is generating more revenue with less working capital, which can be a positive sign of operational efficiency.
Overall, based on the activity ratios analysis, Healthcare Services Group, Inc. has demonstrated improvements in managing its inventory and receivables efficiently, but there may be opportunities to optimize its payables turnover to enhance cash flow management further.
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 | 4.13 | 4.71 | 5.96 | 7.00 | 7.54 |
| Days of sales outstanding (DSO) | days | 84.08 | 74.13 | 67.18 | 52.97 | 67.73 |
| Number of days of payables | days | 18.59 | 15.19 | 14.76 | 11.57 | 11.24 |
The activity ratios of Healthcare Services Group, Inc. provide insights into the efficiency of the company's inventory management, accounts receivable collection, and accounts payable management over the past five years.
1. Days of Inventory on Hand (DOH):
- The trend in DOH shows a consistent improvement from 8.26 days in 2019 to 4.63 days in 2023.
- A decrease in DOH indicates that the company is holding less inventory on hand, reflecting efficient inventory management and potentially lower holding costs.
- This trend suggests that Healthcare Services Group has been able to streamline its inventory processes and could potentially reduce the risk of obsolete inventory.
2. Days of Sales Outstanding (DSO):
- The DSO fluctuates over the years, with a major decrease from 67.60 days in 2019 to 52.97 days in 2020, followed by an increase to 83.75 days in 2023.
- A lower DSO indicates a faster collection of accounts receivable, improving the company's cash flow and liquidity.
- The recent increase in DSO in 2023 may point to challenges in timely collections or changes in the company's credit policies.
3. Number of Days of Payables:
- The days of payables also vary, with a general increasing trend over the years.
- A higher number of days of payables means that the company is taking longer to pay its suppliers, potentially improving cash flow in the short term.
- The increasing trend in payables days could indicate extended payment terms negotiated with suppliers or potential financial challenges.
In conclusion, Healthcare Services Group has shown improvement in inventory management efficiency but may face challenges in accounts receivable collection and a shift towards longer payment cycles with suppliers. Further analysis of the underlying reasons behind these trends will provide a more comprehensive understanding of the company's operational performance and potential areas for improvement.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | 73.59 | 58.43 | 66.27 | 63.76 |
| Total asset turnover | 2.11 | 2.35 | 2.11 | 2.24 | 2.54 |
The fixed asset turnover ratio of Healthcare Services Group, Inc. has exhibited significant variation over the years, with a substantial increase from 2019 to 2020 followed by a sharp decline in 2021, and then a substantial increase again in 2023. The company experienced an exceptionally high fixed asset turnover of 997.84 in 2023, indicating that it generated significant revenue relative to its investment in fixed assets during that year.
On the other hand, the total asset turnover ratio has shown more stability over the same period, fluctuating within a narrower range. The company's total asset turnover ranged from 2.11 to 2.55, implying that it generated between $2.11 and $2.55 in revenue for every dollar invested in total assets during the years analyzed.
Overall, the fixed asset turnover ratio's erratic behavior suggests fluctuations in the company's efficiency in utilizing its fixed assets to generate sales revenue, while the total asset turnover ratio indicates relatively consistent performance in generating revenue from the total asset base. Further analysis of the underlying reasons for these fluctuations in the fixed asset turnover would provide more insights into Healthcare Services Group, Inc.'s operational efficiency and asset utilization.