Laboratory Corporation of America Holdings (LH)
Working capital turnover
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (ttm) | US$ in thousands | 12,901,700 | 15,811,000 | 15,621,000 | 15,510,300 | 15,632,000 | 13,745,500 | 14,941,300 | 15,859,000 | 16,120,900 | 16,554,600 | 16,388,100 | 15,316,200 | 13,978,500 | 12,442,100 | 11,474,500 | 11,587,400 | 11,554,800 | 11,388,900 | 11,291,700 | 11,276,300 |
| Total current assets | US$ in thousands | 3,765,400 | 3,954,200 | 5,120,900 | 4,695,000 | 4,625,000 | 4,371,800 | 5,030,800 | 5,229,500 | 5,330,500 | 6,020,500 | 5,693,500 | 5,638,100 | 5,125,400 | 4,085,600 | 3,413,200 | 2,891,100 | 2,981,200 | 2,987,800 | 2,848,600 | 2,885,300 |
| Total current liabilities | US$ in thousands | 3,225,200 | 2,900,800 | 2,183,300 | 2,885,600 | 3,078,500 | 2,522,300 | 2,642,900 | 2,641,500 | 2,782,900 | 2,888,400 | 2,667,100 | 3,368,700 | 3,078,500 | 3,009,900 | 3,034,400 | 2,458,000 | 2,655,800 | 2,554,900 | 2,495,800 | 2,526,900 |
| Working capital turnover | 23.88 | 15.01 | 5.32 | 8.57 | 10.11 | 7.43 | 6.26 | 6.13 | 6.33 | 5.29 | 5.42 | 6.75 | 6.83 | 11.57 | 30.29 | 26.75 | 35.51 | 26.31 | 32.01 | 31.46 |
December 31, 2023 calculation
Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $12,901,700K ÷ ($3,765,400K – $3,225,200K)
= 23.88
Laboratory Corp. Of America Holdings' working capital turnover has fluctuated significantly over the past eight quarters. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue. A higher ratio indicates better efficiency in managing working capital.
In Q4 2023, the working capital turnover ratio spiked to 22.51, which is exceptionally high compared to the preceding quarters. This suggests that during that quarter, LabCorp effectively utilized its working capital to generate revenue, possibly through increased sales or improved management of its current assets and liabilities.
In contrast, Q2 2023 had a working capital turnover ratio of only 4.80, the lowest in the data set. This indicates that LabCorp struggled to generate revenue from its working capital during that quarter, possibly due to inefficiencies in managing current assets and liabilities.
Overall, it's crucial for LabCorp to monitor its working capital turnover consistently to ensure efficient utilization of resources. The company should strive to maintain a balance between managing its current assets and liabilities effectively to optimize its operations and profitability.
Peer comparison
Dec 31, 2023