HealthEquity Inc (HQY)

Working capital turnover

Jan 31, 2025 Oct 31, 2024 Jul 31, 2024 Apr 30, 2024 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
Revenue (ttm) US$ in thousands 1,203,871 1,153,288 1,088,356 1,018,339 958,410 916,132 884,134 848,438 815,511 788,427 748,466 735,565 717,815 706,638 714,959 700,254 700,489 719,841 694,134 614,980
Total current assets US$ in thousands 477,749 495,246 495,627 404,902 557,436 474,408 422,557 358,409 382,893 332,160 308,586 278,923 351,337 764,131 860,614 865,111 460,177 396,030 383,127 283,783
Total current liabilities US$ in thousands 156,323 154,539 120,908 92,217 117,091 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
Working capital turnover 3.75 3.38 2.90 3.26 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

January 31, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,203,871K ÷ ($477,749K – $156,323K)
= 3.75

The working capital turnover ratio of HealthEquity Inc has experienced fluctuations over the given period, ranging from a high of 4.56 to a low of 1.04. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue, with higher ratios indicating more efficient utilization.

HealthEquity Inc's working capital turnover ratio peaked at 4.56 on April 30, 2022, showcasing a strong ability to generate revenue relative to its working capital. This was followed by a slight decrease to 4.09 on July 31, 2022, and further to 3.55 on October 31, 2022.

However, the ratio showed a noticeable decline to 3.24 on January 31, 2023, and continued to decrease to 2.42 on October 31, 2023, indicating a potential inefficiency in utilizing working capital to drive revenues during that period.

Subsequently, HealthEquity Inc managed to improve its working capital turnover ratio to 3.38 on October 31, 2024, suggesting a better efficiency in generating revenue in relation to its working capital. The ratio further increased to 3.75 on January 31, 2025, indicating continued improvement in this aspect.

Overall, the fluctuations in HealthEquity Inc's working capital turnover ratio suggest varying degrees of efficiency in utilizing working capital to generate revenue over the analyzed period. It is essential for the company to monitor and manage its working capital effectively to maintain a healthy balance between liquidity and operational performance.