Meritage Corporation (MTH)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	6,113,010	6,298,150	5,147,330	4,506,300	3,677,840
Total current assets	US$ in thousands	921,227	861,561	618,335	745,621	319,466
Total current liabilities	US$ in thousands	641,619	671,843	595,896	496,445	405,278
Working capital turnover		21.86	33.20	229.39	18.08	—

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $6,113,010K ÷ ($921,227K – $641,619K)
= 21.86

The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue. A higher ratio indicates better efficiency in utilizing working capital.

In the case of Meritage Homes Corp., the working capital turnover ratio has fluctuated over the years. In 2019, the ratio was exceptionally high at 98.90, indicating that the company generated significant revenue relative to its working capital. However, this ratio dropped sharply in 2021 to 26.10, signifying a decrease in efficiency in utilizing working capital to generate revenue.

The ratio improved in 2022 to 14.66, suggesting that Meritage Homes Corp. enhanced its efficiency in utilizing working capital compared to the previous year. The most recent data for 2023 shows a working capital turnover ratio of 12.00, indicating a further decline in the efficiency of converting working capital into revenue.

Overall, the fluctuating trend in the working capital turnover ratio for Meritage Homes Corp. implies varying levels of efficiency in managing its working capital to support revenue generation across the years analyzed.