Globus Medical (GMED)

Short-term

Turnover ratios

Based on the provided data for Globus Medical's activity ratios, we can see the following trends:

1. Inventory Turnover:
- Globus Medical's inventory turnover has shown variations over the years. In 2020, the ratio was 0.95, indicating that the company's inventory was turned over approximately once during the year. In 2021, the ratio increased to 1.01, suggesting a slight improvement in inventory management. However, in 2022 and 2023, the ratio decreased to 0.88 and 0.65, respectively, which may indicate potential issues such as overstocking or slowing sales. Notably, in 2024, the inventory turnover significantly improved to 1.57, suggesting more efficient management of inventory during that period.

2. Receivables Turnover:
- The data shows that receivables turnover information is not available for any of the years provided. This may indicate that the company does not provide credit sales or does not have significant accounts receivable balances.

3. Payables Turnover:
- Similarly, data for payables turnover is not available for any of the years, which could imply that the company does not have a significant level of trade payables or that the data is not disclosed.

4. Working Capital Turnover:
- Globus Medical's working capital turnover has fluctuated over the years. The ratio was 1.13 in 2020, increased to 1.32 in 2021, and then decreased slightly to 1.24 in 2022. In 2023, the working capital turnover decreased further to 1.03, indicating a potential decrease in efficiency in utilizing working capital. However, in 2024, the ratio surged to 1.91, suggesting a substantial improvement in working capital management efficiency during that period.

In conclusion, the analysis of Globus Medical's activity ratios reveals fluctuations in inventory turnover and working capital turnover over the years, while the data for receivables turnover and payables turnover is not available. It is essential for the company to closely monitor and manage its inventory levels and working capital efficiency to enhance overall operational performance and financial health.

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Average number of days

Activity ratios provide insights into how efficiently a company manages its assets and operations. Let's analyze the activity ratios of Globus Medical based on the provided data:

1. Days of Inventory on Hand (DOH):
- The trend in Globus Medical's DOH over the years indicates fluctuations in the number of days it takes to sell its inventory.
- The DOH has decreased from 384.62 days in 2020 to 232.38 days in 2024, suggesting an improvement in inventory management efficiency.
- However, there was a significant increase in DOH from 2022 to 2023, jumping from 413.79 days to 564.73 days, which may indicate challenges in inventory turnover during that period.

2. Days of Sales Outstanding (DSO):
- The data provided did not include Days of Sales Outstanding (DSO) figures, which would have indicated how quickly Globus Medical collects revenue from its customers.
- Without DSO figures, it is challenging to assess the efficiency of the company's accounts receivable management.

3. Number of Days of Payables:
- Similarly, the data does not include information on the Number of Days of Payables, which would have shown how long Globus Medical takes to pay its suppliers.
- The absence of this information makes it difficult to evaluate the company's payment practices and relationships with suppliers.

In summary, while the trend in Days of Inventory on Hand for Globus Medical shows some fluctuations, the lack of data on Days of Sales Outstanding and Number of Days of Payables limits a comprehensive analysis of the company's operational efficiency.

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Long-term

The long-term activity ratios for Globus Medical, as depicted by the fixed asset turnover and total asset turnover, provide insights into the company's efficiency in utilizing its assets to generate sales over the years.

1. Fixed Asset Turnover:
- In 2020, the fixed asset turnover ratio was 3.64, indicating that Globus Medical generated $3.64 in sales revenue for every dollar of fixed assets invested.
- This ratio improved to 4.33 in 2021, suggesting a more efficient utilization of fixed assets to drive sales.
- Despite a slight decrease to 4.20 in 2022, Globus Medical maintained a relatively high turnover of fixed assets, indicating effective asset management.
- The data for 2023 and 2024 are not available, making it challenging to assess the trend in fixed asset turnover for those years.

2. Total Asset Turnover:
- The total asset turnover ratio reflects how efficiently the company generates sales revenue from all its assets.
- In 2020 and 2021, Globus Medical had total asset turnover ratios of 0.47 and 0.49, respectively, which indicates an increase in the company's ability to generate sales from its total assets.
- The ratio remained consistent at 0.49 in 2022, suggesting continued efficiency in asset utilization for revenue generation.
- However, there was a notable drop to 0.31 in 2023, which may indicate a decline in the company's ability to generate sales from its total assets during that year.
- The ratio rebounded to 0.48 in 2024, showing a partial recovery in asset efficiency to generate sales.

Overall, the fixed asset turnover and total asset turnover ratios provide valuable insights into Globus Medical's ability to maximize revenue generation from its assets over the years, with improvements noted in fixed asset turnover and some fluctuations in total asset turnover during the period under review.