Merit Medical Systems Inc (MMSI)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	1,236,650	1,143,170	1,068,790	952,099	982,685
Total current assets	US$ in thousands	1,108,470	529,084	482,212	429,707	454,538
Total current liabilities	US$ in thousands	203,564	220,645	236,280	185,004	181,656
Working capital turnover		1.37	3.71	4.35	3.89	3.60

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,236,650K ÷ ($1,108,470K – $203,564K)
= 1.37

The working capital turnover for Merit Medical Systems, Inc. has fluctuated over the past five years. It decreased from 3.65 in 2019 to 3.94 in 2020, before further dropping to 4.37 in 2021. Subsequently, there was a significant decline to 3.73 in 2022, followed by a further decrease to 1.39 in 2023.

A working capital turnover ratio below 1 indicates that the company may not be efficiently utilizing its working capital to generate sales revenue. In this case, the decreasing trend in the working capital turnover suggests that the company's efficiency in converting working capital into revenue has been diminishing in recent years. This may raise concerns about the company's ability to effectively manage its current assets and liabilities to support its operations and growth. Further analysis of the company's working capital management strategies and operational efficiency may be warranted to address these declining trends in the working capital turnover ratio.