HealthEquity Inc (HQY)

Short-term

Turnover ratios

Based on the provided data, HealthEquity Inc's activity ratios can provide valuable insights into the company's operational efficiency and effectiveness in managing its resources. Let's analyze each of the activity ratios:

1. Inventory Turnover: The company's inventory turnover ratio is not available for any of the years provided. This could indicate that HealthEquity Inc operates with a minimal level of inventory or the nature of its business does not require significant inventory management.

2. Receivables Turnover: HealthEquity Inc's receivables turnover ratio ranged from 8.21 to 10.19 over the five-year period. A higher turnover ratio indicates that the company is efficient in collecting payments from customers. The increasing trend in receivables turnover suggests that the company has been improving its credit management and reducing the time it takes to collect payments.

3. Payables Turnover: The payables turnover ratio for HealthEquity Inc ranged from 24.88 to 371.56 over the same period. A higher turnover ratio indicates that the company is paying its suppliers more frequently, which may reflect favorable credit terms or efficient cash management. The significant decrease in 2022, followed by fluctuations in subsequent years, may warrant a closer look at the company's payment policies and supplier relationships.

4. Working Capital Turnover: The working capital turnover ratio for HealthEquity Inc ranged from 2.15 to 3.74 over the five years. This ratio measures how efficiently the company is utilizing its working capital to generate sales revenue. A higher turnover ratio signifies better utilization of working capital. The fluctuations in this ratio over the years may indicate varying levels of operational efficiency and capital utilization by the company.

In conclusion, while HealthEquity Inc demonstrates a consistent improvement in receivables turnover and varying trends in payables turnover and working capital turnover, the lack of data for inventory turnover may limit a comprehensive assessment of the company's overall activity efficiency. Further analysis and benchmarking against industry standards would provide a more holistic view of HealthEquity Inc's operational performance.

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Average number of days

The activity ratios of HealthEquity Inc can provide insights into the efficiency of its operations and management of working capital.

1. Days of Inventory on Hand (DOH):
The Days of Inventory on Hand ratio measures how many days it takes for the company to sell its inventory. In this case, the data provided indicates that HealthEquity Inc did not report specific inventory turnover figures for the years 2021 to 2025. This lack of data could suggest that the company either operates on a just-in-time inventory system or may not rely heavily on maintaining significant inventory levels.

2. Days of Sales Outstanding (DSO):
The Days of Sales Outstanding ratio reflects the average number of days it takes for the company to collect payment after making a sale. The trend in HealthEquity Inc's DSO from 2021 to 2025 shows some fluctuations, with the number of days fluctuating between 35.82 and 44.46 days. Lower DSO values indicate that the company is collecting its receivables faster, which is generally a positive sign of efficient accounts receivable management.

3. Number of Days of Payables:
The Number of Days of Payables ratio calculates the average number of days the company takes to pay its suppliers. HealthEquity Inc's payables period increased significantly from 0.98 days in 2021 to 14.67 days in 2022, and then gradually decreased to 6.21 days by 2025. The higher payables days in 2022 could indicate a change in payment terms or cash management strategy. Subsequent reductions suggest improved efficiency in managing payables.

In summary, while the data provided offers limited insights into HealthEquity Inc's inventory management due to the absence of DOH figures, the trends in DSO and payables days indicate varying efficiencies in accounts receivable and accounts payable management over the years. Further analysis and benchmarking against industry standards would provide a more comprehensive view of the company's operational performance.

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Long-term

The Fixed Asset Turnover ratio measures how efficiently a company generates revenue from its fixed assets. Over the years, HealthEquity Inc has shown a significant improvement in this ratio, as evidenced by the increasing trend from 24.07 in January 31, 2021, to 371.19 in January 31, 2025. This indicates that the company is utilizing its fixed assets more effectively to generate sales.

On the other hand, the Total Asset Turnover ratio reflects the company's ability to generate sales from all its assets. HealthEquity Inc has displayed stability in this ratio, with a slight fluctuation from 0.26 in January 31, 2021, to 0.35 in January 31, 2025. This suggests that the company's overall asset utilization has improved over the years, contributing to a higher level of revenue generation relative to its assets.

In conclusion, HealthEquity Inc has shown significant improvements in both Fixed Asset Turnover and Total Asset Turnover ratios, indicating enhanced efficiency in utilizing its assets to drive sales growth and overall performance.