Incyte Corporation (INCY)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	3,693,100	3,394,640	2,986,270	2,666,700	2,158,760
Total current assets	US$ in thousands	4,645,400	4,092,850	3,118,670	2,359,890	2,481,490
Total current liabilities	US$ in thousands	1,240,380	1,157,080	854,308	631,195	513,340
Working capital turnover		1.08	1.16	1.32	1.54	1.10

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,693,100K ÷ ($4,645,400K – $1,240,380K)
= 1.08

Incyte Corp.'s working capital turnover, which indicates how efficiently the company is utilizing its working capital to generate sales revenue, has fluctuated over the last five years. The working capital turnover ratio shows a decreasing trend from 1.54 in 2020 to 1.09 in 2023, with a peak of 1.32 in 2021.

A higher working capital turnover ratio is generally preferred as it signifies that the company is effectively managing its working capital to generate sales. The declining trend observed in Incyte Corp.'s working capital turnover may suggest potential inefficiencies in the management of its current assets and liabilities, impacting the company's ability to generate sales revenue from its working capital.

Further analysis and investigation into the specific components of working capital, such as accounts receivable, inventory, and accounts payable, would be necessary to pinpoint the underlying reasons for the fluctuating working capital turnover ratios. An in-depth assessment of Incyte Corp.'s working capital management practices and potential strategies for improvement may be warranted to optimize the company's operational efficiency and overall financial performance.