Meritage Corporation (MTH)

Working capital turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	6,378,530	6,428,070	6,461,290	6,327,060	6,137,610	6,475,460	6,439,460	6,290,680	6,298,160	5,804,090	5,484,860	5,350,400	5,147,330	5,058,390	4,936,380	4,690,430	4,506,306	4,231,586	4,035,343	3,869,074
Total current assets	US$ in thousands	907,837	6,783,060	6,582,840	6,185,940	6,020,850	1,371,110	5,960,840	5,587,540	5,676,260	5,479,240	5,208,190	4,965,700	4,715,750	4,486,100	4,141,660	883,648	3,681,770	3,510,660	626,326	933,658
Total current liabilities	US$ in thousands	212,477	666,771	728,135	767,162	641,619	755,408	662,000	653,181	671,843	733,506	673,872	717,313	595,896	578,984	531,941	541,167	496,445	467,668	439,690	405,496
Working capital turnover		9.17	1.05	1.10	1.17	1.14	10.52	1.22	1.27	1.26	1.22	1.21	1.26	1.25	1.29	1.37	13.70	1.41	1.39	21.62	7.33

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $6,378,530K ÷ ($907,837K – $212,477K)
= 9.17

The working capital turnover ratio for Meritage Corporation has shown fluctuations over the given time period. It measures how efficiently the company is using its working capital to generate sales revenue. A higher turnover ratio indicates that the company is effectively utilizing its working capital to generate sales.

From March 31, 2020, to June 30, 2020, there was a significant increase in the working capital turnover, indicating improved efficiency in utilizing working capital to generate sales. However, this was followed by a sharp decline in the ratio in the subsequent quarters.

During the period from September 30, 2021, to June 30, 2022, the working capital turnover remained relatively stable at around 1.2, suggesting a moderate level of efficiency in utilizing working capital.

An interesting observation is the spike in the working capital turnover on September 30, 2023, which reached 10.52. This sudden increase may indicate a temporary boost in sales relative to the working capital employed during that period.

Overall, although there have been fluctuations in the working capital turnover ratio, it is essential for Meritage Corporation to analyze the reasons behind these changes to ensure optimal utilization of working capital for generating sales revenue.