HealthEquity Inc (HQY)

Short-term

Turnover ratios

HealthEquity Inc's activity ratios provide insights into the efficiency of its operations and management of key working capital components.

1. Receivables Turnover:
- HealthEquity's receivables turnover has been relatively stable over the past five years, averaging around 8 to 9 times per year.
- This indicates that the company is efficient in collecting payments from customers, with a high turnover rate suggesting that it quickly converts credit sales into cash.

2. Payables Turnover:
- HealthEquity's payables turnover has varied significantly over the years, ranging from 24.88 to 371.56 times per year.
- The sharp fluctuations may indicate changes in payment terms with suppliers or variations in the company's cash management strategies.

3. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company is using its working capital to generate sales.
- HealthEquity's working capital turnover has shown some fluctuations but has generally remained above 2, indicating that the company efficiently utilizes its working capital to support its revenue generation activities.

In summary, HealthEquity Inc's activity ratios reflect a strong focus on managing its working capital components effectively, with consistent receivables turnover, fluctuating payables turnover, and a relatively stable working capital turnover. Continued monitoring of these ratios can provide valuable insights into the company's operational efficiency and financial health.

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Average number of days

Days of inventory on hand (DOH) for HealthEquity Inc could not be calculated from the provided data.

Days of sales outstanding (DSO) decreased from 43.34 days in 2023 to 40.49 days in 2024, indicating that the company is collecting its accounts receivable more efficiently.

The number of days of payables increased from 7.11 days in 2023 to 6.15 days in 2024, suggesting that the company is taking longer to pay its creditors.

Overall, HealthEquity Inc improved its efficiency in collecting receivables but slightly increased the time taken to pay its suppliers, which may impact its working capital management and liquidity position. It's important for the company to monitor these ratios to ensure a healthy balance between collecting revenue and managing expenses.

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Long-term

HealthEquity Inc has shown a significant improvement in its fixed asset turnover ratio over the past five years, with a substantial increase from 15.17 in January 2020 to 157.27 in January 2024. This indicates that the company has become more efficient in utilizing its fixed assets to generate sales revenue.

On the other hand, the total asset turnover ratio has fluctuated over the same period, reaching its peak in January 2021 at 0.26 and hitting its lowest point in January 2022 at 0.23. However, it recovered slightly to 0.30 by January 2024. This could indicate fluctuations in how effectively the company is utilizing all its assets to generate revenue.

In conclusion, HealthEquity Inc has significantly improved its fixed asset turnover, indicating increased efficiency in utilizing its fixed assets to generate revenue. However, the total asset turnover has shown some volatility, which may suggest the need for further analysis to understand the factors affecting the company's overall asset utilization efficiency.