HealthEquity Inc (HQY)

Working capital turnover

		Jan 31, 2024	Oct 31, 2023	Jul 31, 2023	Apr 30, 2023	Jan 31, 2023	Oct 31, 2022	Jul 31, 2022	Apr 30, 2022	Jan 31, 2022	Oct 31, 2021	Jul 31, 2021	Apr 30, 2021	Jan 31, 2021	Oct 31, 2020	Jul 31, 2020	Apr 30, 2020	Jan 31, 2020	Oct 31, 2019	Jul 31, 2019	Apr 30, 2019
Revenue (ttm)	US$ in thousands	958,410	916,132	884,134	848,438	815,511	788,427	748,466	735,565	717,815	706,638	714,959	700,254	700,489	719,841	694,134	614,980	525,114	399,691	323,044	305,671
Total current assets	US$ in thousands	557,436	474,408	422,557	358,409	382,893	332,160	308,586	278,923	351,337	764,131	860,614	865,111	460,177	396,030	383,127	283,783	297,300	270,323	853,516	364,576
Total current liabilities	US$ in thousands	117,091	96,236	103,271	89,656	131,061	110,375	125,517	117,651	153,187	107,074	185,124	192,304	204,701	151,359	153,776	134,605	151,937	141,860	37,141	23,378
Working capital turnover		2.18	2.42	2.77	3.16	3.24	3.55	4.09	4.56	3.62	1.08	1.06	1.04	2.74	2.94	3.03	4.12	3.61	3.11	0.40	0.90

January 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $958,410K ÷ ($557,436K – $117,091K)
= 2.18

The working capital turnover ratio for HealthEquity Inc has shown fluctuations over the past several quarters. The ratio indicates how efficiently the company is utilizing its working capital to generate sales revenue.

In general, an increasing trend in the working capital turnover ratio is viewed positively as it suggests that the company is effectively managing its working capital to support its operations and sales growth. From the data provided, we can see that the working capital turnover ratio has generally been on an upward trend from April 2020 to July 2022, reaching its peak at 4.56 in April 2022. This suggests that the company was able to generate $4.56 in revenue for every dollar of working capital invested during that period.

However, the ratio started to decline from July 2022 onwards, indicating a potential inefficiency in utilizing working capital to generate sales. The ratio dropped to its lowest point at 0.40 in April 2019 before showing an upward trend again.

It's important for HealthEquity Inc to closely monitor and analyze the factors contributing to these fluctuations in the working capital turnover ratio to ensure optimal utilization of working capital and sustainable revenue generation. Further investigation into the company's operations, management of inventory, accounts receivable, and accounts payable may provide insights into improving working capital efficiency in the future.