IDEXX Laboratories Inc (IDXX)

Working capital turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Revenue (ttm)	US$ in thousands	3,660,953	3,587,920	3,514,054	3,430,970	3,367,324	3,339,846	3,308,606	3,274,202	3,215,360	3,135,208	3,046,576	2,858,026	2,706,655	2,591,163	2,474,677	2,457,188	2,406,908	2,350,848	2,290,993	2,251,642
Total current assets	US$ in thousands	1,495,250	1,384,230	1,179,020	1,149,450	1,101,480	1,058,860	1,042,820	1,089,770	955,655	938,037	1,001,230	1,097,800	1,062,740	868,679	779,612	721,351	679,639	703,382	712,298	697,646
Total current liabilities	US$ in thousands	951,547	970,193	883,859	1,065,630	1,235,800	1,189,940	1,166,550	971,341	763,579	633,849	651,809	620,662	582,761	526,841	540,584	846,241	725,337	626,627	618,909	689,619
Working capital turnover		6.73	8.67	11.91	40.93	—	—	—	27.65	16.74	10.31	8.72	5.99	5.64	7.58	10.35	—	—	30.63	24.53	280.51

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $3,660,953K ÷ ($1,495,250K – $951,547K)
= 6.73

Idexx Laboratories, Inc.'s working capital turnover has displayed fluctuations over the past eight quarters. Working capital turnover measures how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover indicates that the company is effectively managing its working capital.

In Q1 2023, the working capital turnover ratio was at its lowest at 40.93, signifying that the company generated $40.93 in revenue for every $1 of working capital. This substantial decrease from the previous quarter's ratio suggests that Idexx Laboratories may have improved its working capital management, leading to increased efficiency in converting working capital to sales.

In contrast, Q2 2023 saw a significant surge in the working capital turnover to 11.91, indicating a decline in productivity in the utilization of working capital compared to Q1 2023. However, this ratio is still higher than the Q4 2022 figure, which might suggest that the company has been successful in maintaining a relatively efficient working capital turnover performance.

The subsequent quarters, Q3 2023 and Q4 2023, showed working capital turnover ratios of 8.67 and 6.73, respectively. While these figures reflect a downward trend, they are comparative to the earlier quarters of 2023. Overall, the varying working capital turnover ratios within the given period indicate fluctuations in the company's utilization of working capital to generate revenue.

It is important for Idexx Laboratories to continue monitoring and managing its working capital efficiency to ensure sustainable growth and profitability in the long run. Understanding the factors influencing the fluctuations in working capital turnover can help the company make informed decisions to optimize its working capital management strategies.