Neogen Corporation (NEOG)

Working capital turnover

		May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020
Revenue	US$ in thousands	924,222	822,447	527,159	468,459	418,170
Total current assets	US$ in thousands	589,233	585,931	626,798	591,451	537,406
Total current liabilities	US$ in thousands	154,323	145,472	77,844	53,599	48,489
Working capital turnover		2.13	1.87	0.96	0.87	0.86

May 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $924,222K ÷ ($589,233K – $154,323K)
= 2.13

Based on the provided data, the working capital turnover of Neogen Corporation has shown a steady improvement over the years. The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales revenue.

In May 2020 and 2021, the working capital turnover stood at 0.86 and 0.87 respectively. This indicates that for each dollar of working capital, Neogen Corporation was generating $0.86 and $0.87 of sales revenue during those years.

The ratio saw a significant improvement in May 2022, reaching 0.96, showing an increased efficiency in utilizing working capital to drive sales. This trend continued in the following years, with the ratio reaching 1.87 in May 2023 and further increasing to 2.13 in May 2024.

This upward trend in the working capital turnover suggests that Neogen Corporation has been able to improve its operational efficiency and effectively manage its working capital to generate higher sales revenue. It is a positive indicator of the company's financial health and operational performance.