Select Medical Holdings (SEM)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | — | 252.22 | — | — | 828.42 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 123.12 | 725.14 | 54.52 | — | 35.54 |
Based on the provided data for Select Medical Holdings, we will analyze the activity ratios:
1. Inventory Turnover:
- In 2020, the inventory turnover ratio was extremely high at 828.42, indicating that the company sold its inventory over 800 times during the year.
- In 2023, the ratio decreased significantly to 252.22, suggesting that the company required more time to sell its inventory compared to 2020.
2. Receivables Turnover:
- The data shows that no specific figures are available for the receivables turnover ratio for any of the years provided. This may suggest variability in the company's collection efficiency or that such data is not publicly reported.
3. Payables Turnover:
- Similar to receivables turnover, there is no information available on the payables turnover ratio for the years provided. This may indicate a lack of data transparency or that the company's payment terms are not readily accessible.
4. Working Capital Turnover:
- In 2020, the working capital turnover ratio was 35.54, indicating that the company generated $35.54 in revenue for each dollar of working capital invested.
- The ratio increased substantially in 2023 to 725.14, signifying a significant improvement in the company's efficiency in utilizing its working capital to generate revenue.
Overall, the analysis of these activity ratios provides insight into how efficiently Select Medical Holdings is managing its inventory, receivables, payables, and working capital to generate sales and revenue. The variations observed in these ratios over the years can offer valuable information about the company's operational performance and financial management strategies.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 1.45 | — | — | 0.44 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the data provided for Select Medical Holdings, we can analyze the activity ratios as follows:
1. Days of Inventory on Hand (DOH):
- As of December 31, 2020: 0.44 days
- As of December 31, 2021: Not available
- As of December 31, 2022: Not available
- As of December 31, 2023: 1.45 days
- As of December 31, 2024: Not available
The DOH ratio indicates the number of days a company takes to sell its inventory. A lower DOH ratio suggests efficient inventory management, as the company is selling its inventory quickly.
2. Days of Sales Outstanding (DSO):
- As of December 31, 2020: Not available
- As of December 31, 2021: Not available
- As of December 31, 2022: Not available
- As of December 31, 2023: Not available
- As of December 31, 2024: Not available
The DSO ratio measures how long it takes for a company to collect on its accounts receivable. A lower DSO ratio indicates that the company is collecting payments from customers more quickly.
3. Number of Days of Payables:
- As of December 31, 2020: Not available
- As of December 31, 2021: Not available
- As of December 31, 2022: Not available
- As of December 31, 2023: Not available
- As of December 31, 2024: Not available
The number of days of payables ratio reflects the number of days it takes for a company to pay its suppliers. A longer payables period can indicate that a company is effectively using its suppliers' funds to finance its operations.
In conclusion, based on the available data, Select Medical Holdings appears to have efficient inventory management (low DOH ratio) and potentially good accounts receivable collection practices (lack of data for DSO). However, the lack of information on payables days makes it challenging to assess the company's payment practices to suppliers.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 2.92 | 6.45 | 5.86 |
| Total asset turnover | 0.92 | 0.87 | 0.83 | 0.84 | 0.72 |
The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. For Select Medical Holdings, the trend shows an improvement in this ratio from 5.86 in 2020 to 6.45 in 2021, indicating that the company generated $6.45 in sales for every $1 of fixed assets in 2021, compared to $5.86 in 2020. However, there was a significant decrease in 2022 to 2.92, which may suggest a decrease in the efficiency of utilizing fixed assets to generate revenue. The ratios for 2023 and 2024 are not available for analysis.
Total asset turnover ratio measures how efficiently a company uses its total assets to generate sales. The total asset turnover for Select Medical Holdings improved from 0.72 in 2020 to 0.84 in 2021, indicating that the company generated more revenue per dollar of total assets in 2021. The ratio remained relatively stable in 2022 and further increased to 0.87 in 2023 and 0.92 in 2024, suggesting an efficient utilization of total assets to generate sales over the years.
In conclusion, while the fixed asset turnover ratio experienced fluctuations, the total asset turnover ratio showed a positive trend over the years, indicating improving efficiency in utilizing assets to generate sales for Select Medical Holdings.