ResMed Inc (RMD)

Working capital turnover

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Revenue (ttm) US$ in thousands 5,146,330 5,021,540 4,926,780 4,807,490 4,546,017 4,444,877 4,364,797 4,235,737 4,222,994 4,015,671 3,763,271 3,624,405 3,578,126 3,539,492 3,443,759 3,348,896 3,196,825 3,091,065 3,091,753 3,027,899
Total current assets US$ in thousands 3,505,600 3,208,420 2,836,180 2,641,120 2,357,720 2,351,300 2,378,080 2,304,580 2,367,830 2,337,820 2,325,160 2,033,700 1,931,480 1,704,300 1,547,240 1,586,260 1,574,760 1,466,150 1,451,480 1,542,610
Total current liabilities US$ in thousands 1,019,120 940,516 851,960 904,079 910,655 773,030 764,073 770,802 758,533 761,691 732,714 692,659 689,299 667,265 621,064 624,158 911,766 876,541 577,335 590,853
Working capital turnover 2.07 2.21 2.48 2.77 3.14 2.82 2.70 2.76 2.62 2.55 2.36 2.70 2.88 3.41 3.72 3.48 4.82 5.24 3.54 3.18

June 30, 2025 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $5,146,330K ÷ ($3,505,600K – $1,019,120K)
= 2.07

The working capital turnover ratio of ResMed Inc. over the specified period exhibits fluctuations, reflecting varying efficiency in utilizing working capital to generate sales. Starting from 3.18 as of September 30, 2020, the ratio increased steadily, reaching a peak of 5.24 on March 31, 2021. This indicates that during this period, ResMed was able to generate more sales per unit of working capital, suggesting improved operational efficiency.

Subsequently, the ratio declined somewhat but remained relatively high through the remainder of 2021, with values such as 4.82 (June 30, 2021) and 3.48 (September 30, 2021). This decrease suggests a deterioration in working capital utilization or possibly increased working capital relative to sales, which may imply operational adjustments or investments impacting efficiency.

Throughout 2022 and into 2023, the ratio continued a downward trend, reaching approximately 2.70 on September 30, 2022, and further declining to about 2.36 by December 31, 2022. It slightly recovered thereafter, with values such as 2.55 (March 31, 2023) and 2.62 (June 30, 2023). This overall decline indicates a reduction in the efficiency with which working capital is converted into sales.

From late 2023 through mid-2025, the ratio remained relatively stable with some upward movement, peaking at 3.14 on June 30, 2024, and settling around 2.07 as of June 30, 2025. The low levels approaching 2.07 suggest that the company's efficiency in leveraging working capital to generate sales has somewhat deteriorated over this period.

In summary, the data reflect an initial enhancement in working capital utilization during early 2021, followed by a gradual decline in efficiency, with some periods of partial recovery. The trend indicates that over time, ResMed has been less effective in converting working capital into sales, which could stem from changes in operational strategies, investment levels, or market conditions impacting the company's working capital management.