Globus Medical (GMED)
Activity ratios
Short-term
Turnover ratios
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Inventory turnover | 0.65 | 0.39 | 0.84 | 0.86 | 0.88 | 0.90 | 0.93 | 0.96 | 1.01 | 1.02 | 1.02 | 0.96 | 0.95 | 0.89 | 0.86 | 0.90 | 0.92 | 0.95 | 0.98 | 1.14 |
| Receivables turnover | 3.11 | 2.47 | 4.53 | 4.73 | 4.71 | 4.79 | 4.91 | 5.66 | 5.78 | 5.33 | 5.01 | 5.08 | 5.33 | 5.07 | 5.49 | 5.72 | 4.84 | 4.88 | 4.73 | 5.13 |
| Payables turnover | 9.67 | 4.06 | 8.38 | 6.91 | 7.31 | 7.97 | 7.25 | 9.33 | 10.90 | 11.52 | 11.13 | 9.98 | 11.95 | 6.84 | 6.99 | 7.72 | 7.31 | 7.34 | 7.14 | 6.52 |
| Working capital turnover | 1.03 | 0.82 | 1.04 | 1.18 | 1.24 | 1.29 | 1.31 | 1.24 | 1.32 | 1.10 | 1.22 | 1.20 | 1.13 | 1.08 | 1.27 | 1.46 | 1.36 | 1.42 | 1.49 | 1.34 |
The activity ratios of Globus Medical Inc provide insights into how efficiently the company is managing its operations and resources.
1. Inventory Turnover: This ratio measures how many times a company sells and replaces its inventory during a period. Globus Medical Inc's inventory turnover has fluctuated over the past eight quarters, ranging from 0.39 to 0.88. The lower turnover in Q3 2023 and Q4 2023 indicates slower sales of inventory compared to earlier quarters, possibly implying excess inventory or challenges in selling products.
2. Receivables Turnover: This ratio reflects how quickly a company collects payments from customers. Globus Medical Inc's receivables turnover has shown more stability, with values ranging from 2.48 to 5.78. The higher turnover figures indicate that the company has been efficient in collecting payments from customers, especially in Q1 2022 and Q2 2022.
3. Payables Turnover: The payables turnover ratio indicates how quickly a company pays its suppliers. Globus Medical Inc's payables turnover has ranged from 4.06 to 9.67 over the past eight quarters. A higher turnover suggests that the company is managing its payables effectively, with faster payment cycles in Q4 2023 and Q1 2022.
4. Working Capital Turnover: This ratio measures how efficiently a company utilizes its working capital to generate revenue. Globus Medical Inc's working capital turnover has varied between 0.82 and 1.31. The increasing trend in working capital turnover from Q1 2022 to Q1 2023 indicates improved efficiency in utilizing working capital to generate sales.
Overall, while some fluctuations are observed in the activity ratios of Globus Medical Inc, the company has generally shown effective management of inventory, receivables, payables, and working capital to support its business operations. Interpretation of these ratios should consider industry norms and trends to provide a more comprehensive analysis of the company's financial performance.
Average number of days
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 564.73 | 935.00 | 432.19 | 425.51 | 413.79 | 404.34 | 391.58 | 380.78 | 361.61 | 359.00 | 356.34 | 378.68 | 384.62 | 412.09 | 423.06 | 406.87 | 398.14 | 385.38 | 372.34 | 320.52 |
| Days of sales outstanding (DSO) | days | 117.49 | 147.57 | 80.50 | 77.11 | 77.55 | 76.23 | 74.40 | 64.48 | 63.11 | 68.52 | 72.84 | 71.90 | 68.51 | 72.01 | 66.45 | 63.83 | 75.49 | 74.73 | 77.14 | 71.13 |
| Number of days of payables | days | 37.73 | 89.82 | 43.55 | 52.80 | 49.96 | 45.77 | 50.33 | 39.13 | 33.50 | 31.67 | 32.78 | 36.58 | 30.56 | 53.36 | 52.24 | 47.29 | 49.92 | 49.73 | 51.09 | 55.96 |
The activity ratios of Globus Medical Inc provide insight into the efficiency of the company's operations in managing its inventory, collecting receivables, and paying its suppliers.
1. Days of Inventory on Hand (DOH): This ratio indicates how many days, on average, it takes for the company to sell its inventory. A higher DOH suggests that the company is holding excess inventory, which may lead to increased storage costs and potential obsolescence. The trend of Globus Medical Inc's DOH shows some fluctuations but generally remains at a high level, indicating a need for careful inventory management.
2. Days of Sales Outstanding (DSO): DSO measures the average number of days it takes for the company to collect receivables from its customers. A lower DSO is favorable as it indicates quicker cash conversion. The DSO trend of Globus Medical Inc shows some variability, but with fluctuations within a reasonable range. The company seems to be efficient in collecting receivables.
3. Number of Days of Payables: This ratio reflects the average number of days it takes for the company to pay its suppliers. A longer number of days of payables suggests that the company is taking longer to settle its payables, which can be advantageous in managing cash flow. The trend of Globus Medical Inc's number of days of payables shows fluctuations but generally stays within a reasonable range, indicating a balanced approach to managing payables.
In summary, Globus Medical Inc needs to focus on improving its inventory management efficiency, while maintaining its effectiveness in collecting receivables and managing payables. Balancing these activities can help the company optimize its working capital and overall liquidity position.
Long-term
| 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 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fixed asset turnover | 2.67 | 2.02 | 4.42 | 4.36 | 4.20 | 4.22 | 4.08 | 4.22 | 4.33 | 4.37 | 4.40 | 3.82 | 3.64 | 3.56 | 3.53 | 3.73 | 3.93 | 3.90 | 3.83 | 3.92 |
| Total asset turnover | 0.31 | 0.23 | 0.50 | 0.50 | 0.49 | 0.51 | 0.51 | 0.48 | 0.49 | 0.49 | 0.51 | 0.48 | 0.47 | 0.50 | 0.51 | 0.54 | 0.51 | 0.53 | 0.53 | 0.54 |
Long-term activity ratios provide insights into how efficiently a company is utilizing its assets to generate revenues. In the case of Globus Medical Inc, we can analyze the fixed asset turnover and total asset turnover ratios over multiple quarters to assess the company's performance.
Fixed asset turnover measures the company's ability to generate revenues from its fixed assets. A higher fixed asset turnover ratio indicates that the company is effectively utilizing its fixed assets to generate sales. Globus Medical Inc's fixed asset turnover ratio has fluctuated over the quarters, with a peak in Q2 2023 at 4.42 and a low in Q3 2023 at 2.02. Overall, the trend shows varying levels of efficiency in utilizing fixed assets to generate revenue.
Total asset turnover reflects how well the company is using all its assets to generate sales. A higher total asset turnover ratio suggests that the company is efficient in generating sales relative to its total assets. Globus Medical Inc's total asset turnover ratio has been relatively consistent over the quarters, hovering around 0.50. This indicates a stable level of efficiency in generating sales compared to the total assets held by the company.
In conclusion, the analysis of Globus Medical Inc's long-term activity ratios reveals fluctuations in the utilization of fixed assets to generate revenue, while total asset turnover shows consistent efficiency in generating sales relative to total assets. It is important for the company to monitor these ratios and strive for continuous improvement in asset utilization to drive profitability and sustainable growth.