Neogen Corporation (NEOG)

Working capital turnover

		Aug 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	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019
Revenue (ttm)	US$ in thousands	1,780,298	1,817,638	1,800,899	1,778,001	1,592,370	1,401,365	1,227,465	1,062,406	1,054,318	901,557	761,778	730,744	692,784	674,433	757,462	743,068	727,266	727,954	723,616	722,206
Total current assets	US$ in thousands	540,650	602,471	624,373	583,793	585,931	555,371	643,333	607,907	626,798	609,633	611,204	609,124	591,451	555,304	578,426	556,699	537,406	514,875	500,183	473,548
Total current liabilities	US$ in thousands	122,689	157,844	176,612	138,130	145,472	107,155	152,558	67,004	77,844	65,710	62,673	50,762	53,599	45,942	44,587	46,442	48,489	39,135	38,791	40,427
Working capital turnover		4.26	4.09	4.02	3.99	3.62	3.13	2.50	1.96	1.92	1.66	1.39	1.31	1.29	1.32	1.42	1.46	1.49	1.53	1.57	1.67

August 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,780,298K ÷ ($540,650K – $122,689K)
= 4.26

Neogen Corporation's working capital turnover has shown fluctuations over the past few periods. The working capital turnover ratio measures the efficiency of the company's management in utilizing its working capital to generate sales revenue.

The working capital turnover ratio has been on an increasing trend from August 2019 to August 2024, indicating an improvement in the company's ability to make sales using its current assets more efficiently. The ratio increased from 1.67 in August 2019 to 4.26 in August 2024.

Ratios above 1 indicate that the company is effectively using its working capital to generate revenue. From the data provided, we can see that Neogen Corporation has consistently maintained a working capital turnover ratio above 1, which is a positive sign.

However, it is essential to note that the ratio fluctuates within the observed periods, suggesting variations in how efficiently the company manages its working capital. The fluctuations may be influenced by factors such as seasonality, changes in the company's operations, or market conditions.

Overall, the increasing trend in Neogen Corporation's working capital turnover ratio indicates improvements in the company's efficiency in using its working capital to generate sales revenue over the observed periods.