Select Medical Holdings (SEM)

Short-term

Turnover ratios

Based on the provided data on Select Medical Holdings' activity ratios, we can make the following observations:

1. Inventory Turnover:
- Select Medical Holdings has shown fluctuating inventory turnover ratios over the years. The ratios vary significantly, ranging from as low as 128.93 to as high as 925.32. Generally, a higher inventory turnover ratio indicates better efficiency in managing and selling inventory.

2. Receivables Turnover:
- The data does not provide any information on receivables turnover, indicating a lack of visibility into how quickly the company is collecting its accounts receivable. This can be a crucial aspect of assessing the company's liquidity and credit management.

3. Payables Turnover:
- Similar to receivables turnover, there is no data available for payables turnover, which could have provided insights into how efficiently the company is managing its payables and vendor relationships.

4. Working Capital Turnover:
- The working capital turnover ratio for Select Medical Holdings has also shown variability over the periods provided. The ratio has fluctuated from as low as 13.06 to as high as 725.14. A higher working capital turnover ratio may indicate effective utilization of working capital to generate sales.

In conclusion, while the inventory turnover and working capital turnover ratios provide some insights into Select Medical Holdings' operational efficiency, the absence of data on receivables turnover and payables turnover limits a comprehensive analysis of the company's overall working capital management and liquidity position. It would be beneficial to have a more complete set of data on these activity ratios to better evaluate the company's financial performance and working capital management.

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Average number of days

Based on the provided data for Select Medical Holdings, we can analyze the company's activity ratios, specifically focusing on the days of inventory on hand (DOH) metric. The DOH ratio measures how many days, on average, a company holds its inventory before selling it.

From the data, we observe fluctuations in the DOH ratio over the reporting periods from March 31, 2020, to December 31, 2024. Notably, the DOH ranged from a low of 0.39 days on June 30, 2021, to a high of 2.83 days on June 30, 2022. These fluctuations may indicate changes in inventory management efficiency or seasonal variations in sales and inventory levels.

It is crucial for Select Medical Holdings to monitor and manage its inventory effectively to ensure optimal working capital utilization and minimize carrying costs associated with excess inventory. A decreasing trend in DOH may suggest efficient inventory turnover, while an increasing trend could indicate potential inventory management challenges.

Additional information on days of sales outstanding (DSO) and number of days of payables was not available in the provided data, limiting the complete analysis of the company's overall working capital management and liquidity position. In future analyses, incorporating DSO and payables turnover ratios would provide a more comprehensive view of Select Medical Holdings' operational efficiency and financial health.

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Long-term

The fixed asset turnover ratio for Select Medical Holdings has shown fluctuations over the years, ranging from a high of 6.59 in September 2022 to a low of 2.92 in December 2022. This ratio measures how effectively the company is utilizing its fixed assets to generate sales. An increasing trend in this ratio indicates that the company is becoming more efficient in utilizing its fixed assets to generate revenue.

On the other hand, the total asset turnover ratio, which measures how well the company is utilizing all its assets to generate sales, has shown a relatively stable trend over the years, ranging from 0.71 to 0.92. A higher ratio suggests that the company is efficient in generating sales relative to its total assets.

Overall, a high fixed asset turnover ratio combined with a stable total asset turnover ratio may indicate that Select Medical Holdings is effectively managing its fixed assets to drive revenue generation while efficiently utilizing all its assets to generate sales. However, further analysis and comparison with industry peers would be beneficial to gain more insights into the company's long-term activity performance.