Merit Medical Systems Inc (MMSI)

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	1,241,203	1,213,421	1,188,414	1,165,681	1,144,662	1,131,114	1,111,439	1,096,568	1,069,451	1,049,645	1,025,702	962,507	955,554	955,472	953,411	990,405	985,453	960,780	940,439	909,348
Total current assets	US$ in thousands	1,108,470	585,318	594,907	557,217	529,084	499,863	492,631	478,092	482,212	463,442	449,782	438,488	429,707	434,626	445,945	462,508	454,538	441,302	426,946	421,783
Total current liabilities	US$ in thousands	203,564	187,133	190,003	215,952	220,645	213,035	195,590	203,831	236,280	213,475	210,604	207,678	185,004	186,047	174,224	165,291	181,656	153,213	176,551	178,459
Working capital turnover		1.37	3.05	2.94	3.42	3.71	3.94	3.74	4.00	4.35	4.20	4.29	4.17	3.90	3.84	3.51	3.33	3.61	3.34	3.76	3.74

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,241,203K ÷ ($1,108,470K – $203,564K)
= 1.37

The working capital turnover ratio for Merit Medical Systems, Inc. has been fluctuating over the past eight quarters. The ratio measures how efficiently the company is utilizing its working capital to generate revenue. A higher ratio indicates that the company is effectively utilizing its resources to generate sales.

In Q4 2022, the working capital turnover ratio was 3.73, indicating that for every dollar of working capital invested, the company generated $3.73 in revenue. However, the ratio decreased in subsequent quarters, reaching its lowest point of 1.39 in Q4 2023. This significant decrease may suggest that the company's efficiency in utilizing its working capital to generate sales has declined.

It is essential for Merit Medical Systems, Inc. to carefully monitor and manage its working capital to ensure efficient operations and maximize revenue generation. The company should analyze the reasons behind the fluctuations in the working capital turnover ratio and take necessary steps to improve its working capital management practices.