Select Medical Holdings (SEM)

Short-term

Turnover ratios

The inventory turnover ratio for Select Medical Holdings Corporation is not provided in the table, indicating either the company does not carry significant levels of inventory or that information is not available.

The receivables turnover ratio has been relatively stable over the five-year period, ranging from 6.17 to 7.15. This indicates that, on average, the company collects its accounts receivable approximately 6 to 7 times a year. A higher turnover ratio is generally preferable as it suggests a shorter time for the company to collect outstanding payments.

The payables turnover ratio has shown fluctuations over the years, with a peak in 2023 at 32.88 and a low in 2021 at 22.60. This ratio signifies how quickly the company pays its suppliers. A higher payables turnover ratio indicates that the company is managing its payables efficiently.

The working capital turnover ratio has exhibited significant variability in performance, with no data for 2021, but notable increases in 2022 and 2023. In 2023, the working capital turnover ratio spiked to 725.14, suggesting substantial efficiency in utilizing working capital to generate revenue. A higher working capital turnover ratio is indicative of the company's ability to generate more revenue per unit of working capital.

Overall, the receivables turnover and payables turnover ratios demonstrate the efficiency of the company in managing its accounts receivable and payable cycles, respectively. The working capital turnover ratio, when available, provides insights into how effectively the company is using its working capital to support revenue generation.

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Average number of days

Days of Inventory on Hand (DOH) for Select Medical Holdings Corporation are not provided in the data table. In terms of Days of Sales Outstanding (DSO), the number of days it takes for the company to collect revenue from its customers has been relatively stable over the past five years, ranging from 51.04 days in 2019 to 59.17 days in 2020. A lower DSO is generally preferable as it indicates faster collections.

The Number of Days of Payables, representing the number of days it takes for the company to pay its suppliers, has shown a decreasing trend over the same period, with values ranging from 11.10 days in 2023 to 16.15 days in 2021. A lower number indicates that the company is paying its suppliers more quickly, which can be beneficial for maintaining good relationships with suppliers.

In comparison to DSO, a shorter number of Days of Payables is generally preferred as it signifies better management of working capital. By keeping the gap between DSO and Days of Payables relatively narrow, Select Medical Holdings Corporation may be effectively managing its cash conversion cycle and working capital efficiency.

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Long-term

The long-term activity ratios for Select Medical Holdings Corporation indicate how efficiently the company is utilizing its assets to generate revenue over the years.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio has been consistently improving from 5.46 in 2019 to 6.51 in 2023.
- This indicates that the company is generating more revenue per dollar of fixed assets invested, reflecting improved efficiency in utilizing its long-term assets to generate sales.

2. Total Asset Turnover:
- The total asset turnover ratio has also shown a positive trend, increasing from 0.74 in 2019 to 0.87 in 2023.
- This indicates that the company is generating more revenue relative to its total assets, suggesting increased efficiency in utilizing both long-term and short-term assets to generate sales.

Overall, the increasing trend in both fixed asset turnover and total asset turnover ratios over the years demonstrates improved efficiency in asset utilization and revenue generation for Select Medical Holdings Corporation.