Neogen Corporation (NEOG)

Working capital turnover

		May 31, 2025	Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020
Revenue (ttm)	US$ in thousands	894,661	905,996	913,828	912,199	924,222	929,238	918,681	919,085	822,447	720,730	630,719	531,203	527,159	514,491	502,956	487,439	468,459	450,108	433,268	426,071
Total current assets	US$ in thousands	576,937	551,713	570,447	540,650	589,233	602,471	624,373	583,793	585,931	555,371	643,333	607,907	626,798	608,326	609,950	609,124	591,451	555,304	578,426	556,699
Total current liabilities	US$ in thousands	174,011	141,200	151,195	122,689	154,323	157,844	176,612	138,130	145,472	107,155	152,558	67,004	77,844	64,403	61,419	50,762	53,599	45,942	44,587	46,442
Working capital turnover		2.22	2.21	2.18	2.18	2.13	2.09	2.05	2.06	1.87	1.61	1.29	0.98	0.96	0.95	0.92	0.87	0.87	0.88	0.81	0.84

May 31, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $894,661K ÷ ($576,937K – $174,011K)
= 2.22

The analysis of Neogen Corporation’s working capital turnover ratio over the specified period indicates a consistent upward trend, suggesting improved efficiency in the utilization of working capital to generate sales. Starting from a ratio of approximately 0.84 as of August 31, 2020, the ratio exhibits gradual increases with some near-term fluctuations, reaching 1.29 by November 30, 2022. This signifies that the company is generating relatively more sales per dollar of working capital employed.

From late 2022 onward, there is a marked acceleration in the ratio’s growth, rising sharply to 1.61 by February 28, 2023, and continuing upward to approximately 2.22 as of May 31, 2025. Such a significant increase suggests that Neogen has enhanced its operational efficiency, possibly through better management of inventory, receivables, and payables, or improved sales performance relative to its working capital base.

Overall, the upward trajectory of the working capital turnover ratio reflects a positive trend in how effectively the company utilizes its short-term assets and liabilities to support sales. The pronounced increase in recent periods indicates strengthening operational performance or strategic improvements in working capital management, contributing to higher sales efficiency relative to working capital invested.