National HealthCare Corporation (NHC)

Short-term

Turnover ratios

National HealthCare Corporation has shown consistent improvement in its inventory turnover ratio over the past five years, with the ratio increasing from 77.82 in 2020 to 97.26 in 2024. This indicates that the company is managing its inventory more efficiently, turning over its inventory at a faster rate.

In terms of receivables turnover, the company's performance has been relatively stable, declining slightly from 11.35 in 2020 to 9.62 in 2024. This suggests that the company is taking slightly longer to collect payments from its customers.

The payables turnover ratio for National HealthCare Corporation has shown fluctuations over the years, peaking at 22.14 in 2022. This indicates that the company is paying its suppliers more quickly in 2022 compared to previous years but maintains an effective payable turnover ratio overall.

The working capital turnover has also varied over the years but has generally maintained a positive trend, reaching a peak of 6.96 in 2022. This ratio reflects how efficiently the company is utilizing its working capital to generate sales.

Overall, National HealthCare Corporation's activity ratios indicate improvements in inventory turnover and working capital turnover, while receivables turnover and payables turnover have shown some fluctuations but remain relatively stable over the years.

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Average number of days

National HealthCare Corporation's activity ratios show how efficiently the company manages its resources and operations.

1. Days of Inventory on Hand (DOH):
- The company's inventory turnover has been improving over the years, decreasing from 4.69 days in 2020 to 3.75 days in 2024. This indicates that the company is selling its inventory faster and more efficiently.

2. Days of Sales Outstanding (DSO):
- DSO has been increasing from 32.16 days in 2020 to 37.92 days in 2024. This suggests that the company is taking longer to collect its accounts receivable, which may indicate issues with credit policies or the ability of customers to pay on time.

3. Number of Days of Payables:
- The number of days of payables has been fluctuating but trending downwards overall, from 20.07 days in 2020 to 16.96 days in 2024. This shows that the company is taking slightly less time to pay its suppliers, which could potentially strain relationships but also indicates effective management of working capital.

Overall, National HealthCare Corporation appears to be efficiently managing its inventory, accounts receivable, and payables, but there may be room for improvement in collections to ensure a healthy cash flow cycle.

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Long-term

Based on the data provided, let's analyze the long-term activity ratios of National HealthCare Corporation:

1. Fixed Asset Turnover:
- The fixed asset turnover ratio indicates how efficiently the company is utilizing its fixed assets to generate revenue.
- The trend shows an improvement from 1.98 in 2020 to 2.31 in 2023, with a slight decrease to 1.91 in 2024.
- A higher fixed asset turnover ratio generally suggests better asset utilization and operational efficiency, as the company is generating more revenue per dollar of fixed assets invested.

2. Total Asset Turnover:
- The total asset turnover ratio measures how efficiently the company is generating revenue relative to its total assets.
- The company's total asset turnover ratio has shown a steady increase from 0.75 in 2020 to 0.86 in 2024.
- An increasing total asset turnover ratio over time indicates that the company is generating more revenue for each dollar of assets held.

In conclusion, based on the data provided, National HealthCare Corporation has shown improvements in both fixed asset turnover and total asset turnover ratios over the years, indicating efficient asset utilization and revenue generation. However, the slight decrease in fixed asset turnover in 2024 may warrant further investigation to understand the underlying reasons for the change.