Incyte Corporation (INCY)

Working capital turnover

		Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	4,209,569	3,949,271	3,765,356	3,693,101	3,609,260	3,513,520	3,470,962	3,395,993	3,330,147	3,320,472	3,114,784	2,986,267	2,912,923	2,720,579	2,702,913	2,666,702	2,456,582	2,387,520	2,229,409	2,158,759
Total current assets	US$ in thousands	3,239,030	2,808,710	4,849,090	4,645,400	4,402,660	4,264,430	3,971,630	4,092,850	3,821,110	3,625,840	3,288,090	3,118,670	2,923,800	2,620,060	2,449,970	2,359,890	2,159,420	2,077,620	1,716,170	2,481,490
Total current liabilities	US$ in thousands	1,641,850	1,501,650	1,396,450	1,240,380	1,124,680	1,118,770	1,006,110	1,157,080	1,006,600	926,674	886,163	854,308	742,712	660,324	623,881	631,195	606,202	556,513	503,412	513,340
Working capital turnover		2.64	3.02	1.09	1.08	1.10	1.12	1.17	1.16	1.18	1.23	1.30	1.32	1.34	1.39	1.48	1.54	1.58	1.57	1.84	1.10

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $4,209,569K ÷ ($3,239,030K – $1,641,850K)
= 2.64

Working capital turnover is a financial ratio that measures how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover ratio indicates better efficiency in managing working capital.

Analyzing Incyte Corporation's working capital turnover over the last few years, we observe a fluctuating trend:

- The working capital turnover ratio was 1.10 as of December 31, 2019, indicating that for every dollar of working capital, the company generated $1.10 in sales revenue.
- The ratio improved to 1.84 by March 31, 2020, reflecting a more efficient utilization of working capital.
- Subsequently, the ratio fluctuated between 1.57 and 1.48 over the next year, showing some variability in working capital efficiency.
- By September 30, 2021, the ratio declined to 1.34, indicating a slight decrease in efficiency.
- The ratio continued to decrease, reaching 1.08 by December 31, 2023.

The most significant change occurred in the later part of 2024, with a sudden spike in working capital turnover to 3.02 on September 30, 2024, and 2.64 by December 31, 2024, which could be attributed to various factors such as changes in company operations, sales growth, or working capital management strategies.

Overall, Incyte Corporation's working capital turnover has seen fluctuations, with periods of both improvement and decline in efficiency. It is essential for the company to closely monitor and manage working capital effectively to sustain and enhance operational efficiency and financial performance.