Globus Medical (GMED)

Short-term

Turnover ratios

Inventory turnover for Globus Medical Inc has shown a slight decrease over the past five years, indicating that the company is taking longer to sell its inventory. This could signal potential issues with inventory management or demand for the company's products.

On the other hand, receivables turnover has been decreasing steadily over the same period, which suggests that it is taking the company longer to collect payment from its customers. This may indicate potential challenges in collecting receivables promptly or changes in customer payment behavior.

Payables turnover has fluctuated over the years but has generally remained at a relatively high level, indicating that the company is efficient in managing its payments to suppliers. A higher payables turnover ratio suggests that the company is taking longer to pay its suppliers, which could potentially be beneficial for cash flow management.

Working capital turnover has shown some variation over the years but has generally remained consistent. This ratio measures how efficiently the company is using its working capital to generate sales. A higher working capital turnover ratio indicates that the company is generating more sales with less working capital, which is typically seen as a positive sign of operational efficiency.

Overall, the analysis of Globus Medical Inc's activity ratios suggests areas of strength and potential areas for improvement in managing inventory, accounts receivable, payables, and working capital turnover.

---

Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales. Let's analyze Globus Medical Inc's activity ratios:

1. Days of Inventory on Hand (DOH):
- Globus Medical Inc's days of inventory on hand have been increasing steadily over the past five years, from 398.14 days in 2019 to 564.73 days in 2023.
- This indicates that the company is holding inventory for a longer period, potentially tying up working capital and increasing carrying costs.

2. Days of Sales Outstanding (DSO):
- Globus Medical Inc's days of sales outstanding have also been on the rise, from 71.72 days in 2019 to 117.11 days in 2023.
- The increase in DSO suggests that the company is taking longer to collect payments from customers, which may impact cash flow and liquidity.

3. Number of Days of Payables:
- The number of days of payables for Globus Medical Inc fluctuated over the years but showed a decreasing trend from 49.92 days in 2019 to 37.73 days in 2023.
- A lower number of days of payables indicates that the company is paying its suppliers more quickly, which can strain cash flow but may also improve relationships with suppliers.

Overall, the analysis of Globus Medical Inc's activity ratios reveals certain inefficiencies in inventory management and accounts receivable collection. The company should focus on optimizing its inventory levels and collections processes to improve cash flow and overall operational efficiency.

---

Long-term

The long-term activity ratios for Globus Medical Inc indicate the company's efficiency in utilizing its assets over the past five years. The fixed asset turnover, which measures how effectively the company generates sales from its fixed assets, has shown a decreasing trend from 2019 to 2023. In 2023, the fixed asset turnover was 2.67, suggesting that the company generated $2.67 in sales for every dollar invested in fixed assets.

On the other hand, the total asset turnover ratio, which reflects the company's ability to generate sales from all its assets, also decreased over the period, although it has been relatively stable compared to the fixed asset turnover. In 2023, the total asset turnover was 0.31, indicating that the company generated $0.31 in sales for every dollar of total assets held.

Overall, the declining trend in both fixed asset turnover and total asset turnover ratios may suggest a potential decrease in efficiency in generating sales from assets for Globus Medical Inc. Further analysis and comparison with industry benchmarks would provide more insights into the company's asset management efficiency and operational performance.