Inspire Medical Systems Inc (INSP)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	624,799	406,179	231,266	113,364	82,050
Total current assets	US$ in thousands	593,739	530,032	268,537	269,869	170,636
Total current liabilities	US$ in thousands	78,105	61,186	41,307	20,725	16,856
Working capital turnover		1.21	0.87	1.02	0.46	0.53

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $624,799K ÷ ($593,739K – $78,105K)
= 1.21

Working capital turnover measures how efficiently a company utilizes its working capital to generate sales revenue. A higher working capital turnover indicates better efficiency in managing current assets and liabilities.

Based on the data provided for Inspire Medical Systems Inc from 2019 to 2023, the working capital turnover has varied over the years. In 2019, the ratio was 0.53, indicating that the company generated $0.53 in sales for every dollar of working capital invested. Subsequently, there was an upward trend in 2020 (0.46), 2021 (1.02), 2022 (0.87), and 2023 (1.21), indicating improving efficiency in utilizing working capital to drive sales.

The significant increase in working capital turnover from 2019 to 2023 suggests that Inspire Medical Systems Inc has been more efficient in managing its working capital to support sales growth. This improvement could be attributed to better inventory management, accounts receivable collection, or renegotiation of payment terms with suppliers.

Overall, a higher working capital turnover ratio reflects strong operational efficiency and effective management of current assets and liabilities by Inspire Medical Systems Inc in recent years.