Laboratory Corporation of America Holdings (LH)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 12,161,600 | 11,863,900 | 16,120,900 | 13,978,500 | 11,554,800 |
| Total current assets | US$ in thousands | 3,765,400 | 4,625,000 | 5,330,500 | 5,125,400 | 2,981,200 |
| Total current liabilities | US$ in thousands | 3,225,200 | 3,078,500 | 2,782,900 | 3,078,500 | 2,655,800 |
| Working capital turnover | 22.51 | 7.67 | 6.33 | 6.83 | 35.51 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $12,161,600K ÷ ($3,765,400K – $3,225,200K)
= 22.51
The working capital turnover ratio for Laboratory Corp. Of America Holdings has shown varying trends over the past five years. In 2023, the ratio stands at 22.51, reflecting a significant increase compared to the previous year's ratio of 9.62. This substantial rise indicates that the company is generating revenue more efficiently relative to its working capital in 2023.
However, it is worth noting that the ratio was lower in 2021 and 2020 at 6.33 and 6.83, respectively. This suggests that the company's ability to efficiently utilize its working capital to generate sales was relatively weaker in those years.
The working capital turnover ratio spiked significantly to 35.51 in 2019, indicating strong efficiency in generating sales relative to working capital that year. The decrease in the ratio in the subsequent years suggests a potential shift in the company's working capital management strategy.
Overall, the fluctuation in the working capital turnover ratio over the years indicates that Laboratory Corp. Of America Holdings has experienced varying levels of efficiency in utilizing its working capital to drive sales during the period under review. This ratio can provide insights into the company's operational efficiency and management of working capital resources.
Peer comparison
Dec 31, 2023