Healthcare Services Group Inc (HCSG)
Total asset turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,664,880 | 1,690,840 | 1,641,960 | 1,760,300 | 1,837,420 |
| Total assets | US$ in thousands | 790,652 | 720,836 | 777,529 | 785,031 | 722,592 |
| Total asset turnover | 2.11 | 2.35 | 2.11 | 2.24 | 2.54 |
December 31, 2023 calculation
Total asset turnover = Revenue ÷ Total assets
= $1,664,880K ÷ $790,652K
= 2.11
The total asset turnover of Healthcare Services Group, Inc. has shown some fluctuation over the past five years. The ratio was 2.55 in 2019, indicating that the company generated $2.55 in revenue for every dollar of total assets. However, the ratio decreased to 2.24 in 2020 before slightly increasing to 2.11 in 2021. It then increased to 2.35 in 2022 but decreased again to 2.11 in 2023.
A total asset turnover ratio above 1 indicates that the company is effectively utilizing its assets to generate revenue. A higher ratio is generally favorable as it suggests that the company is efficient in generating revenue from its assets. However, the decreasing trend observed in recent years may indicate a potential decrease in efficiency in utilizing assets to generate revenue.
The company should further analyze the factors contributing to the fluctuations in the total asset turnover ratio to identify areas for improvement in asset utilization and revenue generation efficiency. It is important for the company to maintain or improve this ratio to ensure optimal operational performance and financial health.