R1 RCM Inc (RCM)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Let's analyze the activity ratios of R1 RCM Inc. based on the provided data.

1. Receivables Turnover:
- The receivables turnover ratio measures how many times a company collects its average accounts receivable balance during a period.
- R1 RCM Inc.'s receivables turnover has been relatively stable, ranging from 6.50 to 8.11 over the past eight quarters.
- A higher turnover ratio indicates that the company is collecting its receivables more quickly, which can be a positive sign of efficient management of accounts receivable.

2. Payables Turnover:
- The payables turnover ratio reflects how quickly a company pays its suppliers.
- R1 RCM Inc.'s payables turnover has fluctuated but generally remained at elevated levels, ranging from 43.27 to 87.74 over the same period.
- A higher turnover ratio suggests that the company is efficiently managing its accounts payable by paying suppliers promptly.

3. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales.
- R1 RCM Inc.'s working capital turnover has varied between 7.33 and 12.76 over the past eight quarters.
- A higher turnover ratio indicates that the company is effectively utilizing its working capital to generate revenue.

Overall, R1 RCM Inc. has maintained relatively stable receivables turnover, fluctuating payables turnover, and varying working capital turnover ratios. Analyzing these ratios provides insights into the company's operational efficiency, liquidity management, and effectiveness in utilizing working capital to support its business activities.

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Average number of days

The Days of Inventory on Hand (DOH) ratio for R1 RCM Inc. is not available in the data provided for the quarters analyzed.

The Days of Sales Outstanding (DSO) ratio, which measures how long it takes for a company to collect revenue after a sale, has been relatively stable over the quarters, ranging from a low of 32.54 days in Q1 2022 to a high of 59.95 days in Q2 2022. A downward trend in DSO is generally positive, indicating improved efficiency in collecting receivables.

The Number of Days of Payables ratio, which reflects the average number of days it takes a company to pay its suppliers, shows variability over the quarters. The lowest number of days of payables was in Q1 2022 at 4.16 days, while the highest was in Q2 2022 at 16.94 days. A lower number of days of payables may indicate stronger cash management practices or better relationships with suppliers.

Overall, a detailed analysis of R1 RCM Inc.'s activity ratios suggests that the company has been managing its sales collection and payment cycles efficiently, with some fluctuations in the number of days of payables possibly reflecting changes in payment terms or operational dynamics.

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Long-term

Long-term activity ratios provide insights into how efficiently a company utilizes its assets to generate revenue.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how effectively a company employs its fixed assets to generate sales.
- R1 RCM Inc. shows a consistently high fixed asset turnover over the quarters, with values ranging from 10.26 to 12.98. This indicates that the company efficiently uses its fixed assets to generate revenue.
- The trend of increasing fixed asset turnover from Q2 2022 to Q1 2023 suggests that the company is improving its efficiency in utilizing fixed assets to drive sales.

2. Total Asset Turnover:
- The total asset turnover ratio evaluates how efficiently a company employs all its assets to generate revenue.
- R1 RCM Inc. has a total asset turnover ratio that fluctuates between 0.31 and 0.45 over the quarters. This suggests that the company generates less revenue relative to its total assets compared to just its fixed assets.
- The low total asset turnover indicates that there may be opportunities for R1 RCM Inc. to improve its overall asset utilization to enhance revenue generation.

Overall, while R1 RCM Inc. demonstrates strong efficiency in utilizing its fixed assets to generate sales, there is room for improvement in effectively using its total assets to drive revenue growth.