Vir Biotechnology Inc (VIR)

Working capital turnover

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 Jun 30, 2020
Revenue (ttm) US$ in thousands 86,180 118,803 490,721 444,237 1,613,740 2,377,077 2,106,136 2,325,891 1,095,407 284,394 182,706 72,626 76,368 75,614 75,089
Total current assets US$ in thousands 1,588,230 1,769,180 1,946,330 2,358,630 2,519,080 2,413,620 2,288,270 2,567,550 1,562,820 1,066,340 862,295 993,114 772,365 849,572 578,761
Total current liabilities US$ in thousands 175,407 165,050 225,623 485,288 511,029 308,203 477,868 702,361 341,242 233,724 146,024 361,099 99,064 76,998 54,940
Working capital turnover 0.06 0.07 0.29 0.24 0.80 1.13 1.16 1.25 0.90 0.34 0.26 0.11 0.11 0.10 0.14

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $86,180K ÷ ($1,588,230K – $175,407K)
= 0.06

The working capital turnover of Vir Biotechnology Inc over the past eight quarters has exhibited a declining trend from Q1 2022 to Q4 2023. This ratio measures the efficiency of the company in utilizing its working capital to generate revenue. A working capital turnover ratio of less than 1 indicates that the company's working capital is not being efficiently utilized to support sales.

The decreasing trend in the working capital turnover from 1.25 in Q1 2022 to 0.06 in Q4 2023 suggests that Vir Biotechnology Inc may be experiencing challenges in effectively managing its working capital to support its revenue generation activities. This decline could be a red flag for potential liquidity issues or inefficiencies in the company's operations.

It is important for Vir Biotechnology Inc to closely monitor its working capital turnover and take appropriate measures to improve this ratio, such as optimizing inventory levels, managing accounts receivable and accounts payable efficiently, and streamlining its operational processes. By enhancing the efficiency of its working capital utilization, the company can potentially improve its financial performance and overall liquidity position.