Neogen Corporation (NEOG)

Working capital turnover

		May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020	May 31, 2019
Revenue	US$ in thousands	1,616,090	1,054,320	936,918	836,340	828,372
Total current assets	US$ in thousands	585,931	626,798	591,451	537,406	449,529
Total current liabilities	US$ in thousands	145,472	77,844	53,599	48,489	38,251
Working capital turnover		3.67	1.92	1.74	1.71	2.01

May 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,616,090K ÷ ($585,931K – $145,472K)
= 3.67

Based on the data provided, the working capital turnover for Neogen Corp. has shown fluctuations over the past five years. The working capital turnover ratio measures how effectively a company is utilizing its working capital to generate sales revenue.

In 2023, the working capital turnover ratio improved to 1.87 from 0.96 in 2022, indicating that Neogen Corp. efficiently utilized its working capital to generate sales. This suggests that the company was able to generate a higher level of sales revenue for each unit of working capital during the year.

However, in the preceding years, the working capital turnover ratio was relatively lower, with values of 0.87 in 2021, 0.86 in 2020, and 1.01 in 2019. These figures suggest that the company was less efficient in leveraging its working capital to generate sales revenue during those years.

Overall, the trend in the working capital turnover indicates significant improvement in 2023 compared to the previous years. This improvement reflects a more effective management of working capital in generating sales revenue, which may be a positive signal for the company's operational efficiency.