Hologic Inc (HOLX)
Working capital turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 4,030,400 | 4,862,800 | 5,632,300 | 3,776,400 | 3,367,300 |
| Total current assets | US$ in thousands | 4,184,500 | 3,862,000 | 3,168,700 | 2,222,300 | 1,793,100 |
| Total current liabilities | US$ in thousands | 1,207,300 | 937,700 | 1,326,800 | 1,239,300 | 1,070,100 |
| Working capital turnover | 1.35 | 1.66 | 3.06 | 3.84 | 4.66 |
September 30, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,030,400K ÷ ($4,184,500K – $1,207,300K)
= 1.35
The working capital turnover ratio measures the efficiency with which a company utilizes its working capital to generate sales. A higher ratio indicates better utilization of working capital.
Hologic, Inc.'s working capital turnover has shown a declining trend over the last five years, decreasing from 5.58 in 2019 to 1.35 in 2023. This suggests a decrease in the company's ability to efficiently use its working capital to generate sales.
The declining trend could be indicative of changes in the company's operating cycle, management of inventory, or credit policies. A lower working capital turnover ratio may also indicate inefficiencies in the company's working capital management, which can impact its overall liquidity and operational performance.
Further analysis, including the examination of the company's working capital components such as inventory, accounts receivable, and accounts payable, is necessary to understand the underlying reasons for this trend and its potential impact on the company's financial health.
Peer comparison
Sep 30, 2023