Hims Hers Health Inc (HIMS)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 872,000 | 526,916 | 271,878 | 148,757 | 82,558 |
| Total current assets | US$ in thousands | 265,053 | 216,595 | 269,905 | 113,084 | 1,658 |
| Total current liabilities | US$ in thousands | 88,468 | 47,941 | 79,221 | 15,228 | 979 |
| Working capital turnover | 4.94 | 3.12 | 1.43 | 1.52 | 121.59 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $872,000K ÷ ($265,053K – $88,468K)
= 4.94
Hims Hers Health Inc's working capital turnover has fluctuated over the last five years, indicating the efficiency with which the company is utilizing its working capital to generate revenue. The working capital turnover ratio measures how well a company is utilizing its current assets to support its operations.
In 2019, the company experienced an exceptionally high working capital turnover of 121.59, suggesting that it was effectively using its current assets to generate revenue. However, this figure dropped significantly in the subsequent years, with the ratio decreasing to 1.52 in 2020, 1.43 in 2021, and 3.12 in 2022. This downward trend could indicate potential inefficiencies in how the company is managing its working capital during these years.
In contrast, the working capital turnover ratio improved in 2023 to 4.94, signaling a positive shift towards utilizing working capital more effectively to drive revenue generation. This improvement may be attributed to better management of current assets and liabilities to support day-to-day operations and generate sales.
Overall, Hims Hers Health Inc's working capital turnover ratio has shown fluctuation in recent years, with a significant improvement in 2023. It will be crucial for the company to sustain this positive trend and continue optimizing its use of working capital to support its operational activities and revenue generation.