US Physicalrapy Inc (USPH)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 604,802 | 553,144 | 495,022 | 422,969 | 481,969 |
| Total current assets | US$ in thousands | 233,375 | 111,266 | 95,166 | 87,636 | 85,386 |
| Total current liabilities | US$ in thousands | 102,185 | 85,489 | 83,481 | 93,492 | 60,563 |
| Working capital turnover | 4.61 | 21.46 | 42.36 | — | 19.42 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $604,802K ÷ ($233,375K – $102,185K)
= 4.61
Working capital turnover is a financial ratio that measures a company's efficiency in generating revenue from its working capital. A higher working capital turnover ratio indicates that the company is efficiently using its working capital to generate sales.
Analyzing the working capital turnover of U.S. Physical Therapy, Inc. over the past five years, we observe fluctuations in the ratio. In 2023, the working capital turnover ratio was 4.61, indicating a decrease from 21.46 in 2022 and a significant drop from 42.36 in 2021.
The substantial decline in the working capital turnover from 2021 to 2023 could be a cause for concern as it suggests a reduction in the company's ability to efficiently convert working capital into sales. However, it is also important to note that the working capital turnover ratio is relatively higher in 2023 compared to previous years.
The absence of a working capital turnover ratio for 2020 suggests that the data may not be available or applicable for that year. The increase in 2019 to 19.42 from the missing 2020 ratio indicates improved efficiency in utilizing working capital for generating revenue.
Overall, a downward trend in the working capital turnover ratio may signify potential inefficiencies in managing working capital and converting it into sales, warranting further investigation into the company's operational and financial strategies.
Peer comparison
Dec 31, 2023