Laboratory Corporation of America Holdings (LH)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2024 Sep 30, 2024 Jun 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
Inventory turnover 19.03 18.97 20.35 18.71 18.53 23.97 22.20 22.05 23.58 19.90 22.93 24.05 26.15 25.32 23.88 22.20 21.33 21.84 24.39 33.06
Receivables turnover 6.72 6.18 5.98 5.92 6.38 7.74 7.86 6.33 7.07 6.38 6.78 7.12 7.17 7.09 7.42 6.59 5.64 5.94 6.91 7.82
Payables turnover 10.72 13.86 11.82 12.78 10.63 16.01 15.18 12.06 13.02 12.16 13.26 17.00 16.89 15.54 16.77 15.28 14.13 13.41 15.63 14.76
Working capital turnover 8.81 8.49 — — 22.51 14.31 5.07 8.16 10.11 7.43 6.26 6.13 6.33 5.29 5.42 6.75 6.83 11.57 30.29 26.75

The inventory turnover ratio measures how efficiently a company is managing its inventory by showing how many times the inventory is sold and replaced in a given period. Laboratory Corporation of America Holdings' inventory turnover has fluctuated over the years, ranging from a high of 33.06 in March 2020 to a low of 18.53 in December 2023. A generally decreasing trend in inventory turnover may indicate potential issues with excess inventory or slowing sales.

The receivables turnover ratio reflects how well a company is collecting on its credit sales. Laboratory Corporation of America Holdings' receivables turnover has varied, with the highest being 7.86 in June 30, 2023, and the lowest being 5.64 in December 31, 2020. The fluctuation in this ratio suggests changes in the company's credit policies or the effectiveness of its collection efforts.

The payables turnover ratio measures how quickly a company pays its suppliers. Laboratory Corporation of America Holdings' payables turnover has shown some volatility, with values ranging from 10.63 in December 31, 2023, to 17.00 in March 31, 2022. A higher turnover ratio may indicate that the company is paying its suppliers more quickly, which could impact its cash flow and relationships with vendors.

The working capital turnover ratio evaluates how effectively the company is using its working capital to generate sales. Laboratory Corporation of America Holdings' working capital turnover has fluctuated over time, with the highest being 30.29 in June 30, 2020. The negative values for March 31, 2024, and June 30, 2024, indicate that there was insufficient data available for those periods.

In conclusion, the analysis of Laboratory Corporation of America Holdings' activity ratios reveals trends and fluctuations that may reflect changes in the company's operations and financial management practices. Further investigation and context are needed to fully understand the implications of these ratios on the company's performance.

Average number of days

Dec 31, 2024 Sep 30, 2024 Jun 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
Days of inventory on hand (DOH) days 19.18 19.24 17.93 19.51 19.69 15.23 16.44 16.55 15.48 18.34 15.92 15.17 13.96 14.41 15.29 16.44 17.11 16.71 14.97 11.04
Days of sales outstanding (DSO) days 54.33 59.06 61.00 61.61 57.20 47.18 46.45 57.68 51.64 57.18 53.87 51.24 50.89 51.49 49.22 55.37 64.75 61.46 52.84 46.69
Number of days of payables days 34.06 26.33 30.88 28.56 34.34 22.81 24.04 30.28 28.03 30.02 27.53 21.47 21.60 23.49 21.77 23.89 25.84 27.23 23.35 24.72

Based on the data provided for Laboratory Corporation of America Holdings, let's analyze the activity ratios over the years:

1. Days of Inventory on Hand (DOH): This ratio measures how many days worth of inventory a company holds before selling it. The trend for DOH has been somewhat volatile with fluctuations between 13 to 19 days over the years. A lower DOH indicates faster inventory turnover, which may imply efficient inventory management.

2. Days of Sales Outstanding (DSO): DSO measures how long it takes for the company to collect payments from its customers. The DSO for Laboratory Corporation of America Holdings has ranged from around 46 to 64 days. A lower DSO indicates quicker collection of receivables, suggesting effective credit and collection practices.

3. Number of Days of Payables: This ratio reflects how long a company takes to pay its suppliers. The number of days of payables has fluctuated between 21 to 34 days. A longer period suggests the company is taking more time to pay its bills, potentially indicating better cash flow management.

Overall, while the company's inventory turnover and accounts receivable collection seem relatively stable, there is some volatility in the payment period to suppliers. It would be essential for the company to maintain a balance in managing its inventory effectively, collecting payments promptly, and optimizing payment terms with suppliers for efficient cash flow management.

Long-term

Dec 31, 2024 Sep 30, 2024 Jun 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
Fixed asset turnover 4.27 4.17 4.26 4.24 4.18 5.34 5.39 5.02 5.59 4.76 5.21 5.65 5.73 6.15 6.07 5.68 5.12 4.77 4.37 4.44
Total asset turnover 0.71 0.68 0.75 0.74 0.73 0.89 0.84 0.73 0.78 0.69 0.73 0.77 0.79 0.79 0.80 0.75 0.70 0.66 0.64 0.67

The long-term activity ratios of Laboratory Corporation of America Holdings indicate how efficiently the company is utilizing its assets to generate sales over an extended period.

1. Fixed Asset Turnover: In the past five years, the fixed asset turnover ratio of Laboratory Corporation of America Holdings has fluctuated between 4.18 and 6.15. The trend shows an overall increase in efficiency in utilizing fixed assets to generate revenue, with some fluctuations in between. The company's fixed asset turnover was at its peak in September 2021 and has slightly decreased since then but remains relatively high.

2. Total Asset Turnover: The total asset turnover ratio of the company has ranged from 0.64 to 0.89 over the same period. This ratio reveals that the company has been efficient in generating sales from its total assets, as it has consistently maintained a ratio above 0.70. The company showed a notable increase in total asset turnover in September 2023, indicating improved efficiency in generating sales compared to the preceding periods.

Overall, both the fixed asset turnover and total asset turnover ratios for Laboratory Corporation of America Holdings suggest that the company has been effectively utilizing its assets to drive revenue growth over the analyzed years.