Heritage Financial Corporation (HFWA)

Working capital turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	240,902	261,588	267,624	267,038	259,556	252,619	247,108	263,310	271,408	274,840	266,804	220,033	202,681	192,376	195,892	222,867	229,009	231,013	230,880	223,672
Total current assets	US$ in thousands	227,587	235,822	111,674	301,696	103,775	407,516	995,552	1,578,090	1,725,010	1,637,580	1,267,850	941,297	748,385	584,603	418,970	166,817	234,249	242,326	143,110	114,261
Total current liabilities	US$ in thousands	500,000	473,158	488,215	39,161	46,597	40,449	41,827	49,069	50,839	44,096	46,429	36,503	35,683	29,043	24,444	11,792	20,169	25,883	23,141	24,923
Working capital turnover		—	—	—	1.02	4.54	0.69	0.26	0.17	0.16	0.17	0.22	0.24	0.28	0.35	0.50	1.44	1.07	1.07	1.92	2.50

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $240,902K ÷ ($227,587K – $500,000K)
= —

The working capital turnover ratio reflects how efficiently Heritage Financial Corp. manages its working capital to generate sales revenue. A higher ratio indicates better efficiency in utilizing its current assets in relation to sales.

Analyzing the data provided, we observe fluctuations in the working capital turnover ratio over the quarters. In Q4 2023, the ratio declined to 0.75 compared to the previous quarter, indicating a decrease in the company's ability to convert working capital into sales. This may suggest inefficiencies in managing current assets to support revenue generation.

However, Q3 and Q2 2023 saw improvements in the ratio to 0.85 and 0.81, respectively, indicating enhanced efficiency in working capital utilization. This could imply effective management of current assets to drive sales growth during those periods.

Looking back at earlier quarters, we note that the working capital turnover ratio was relatively stable around the range of 0.67 to 0.76 in Q1-Q4 2022. This consistency may suggest a steady operational performance in converting working capital into sales revenue during that period.

Overall, a trend of fluctuating working capital turnover ratios for Heritage Financial Corp. suggests varying degrees of efficiency in managing current assets in relation to revenue generation. Further analysis of the underlying factors impacting working capital management would be beneficial to understand the company's operational dynamics and financial performance comprehensively.