Globus Medical (GMED)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 1,568,480 | 1,022,840 | 958,102 | 789,042 | 785,368 |
| Total current assets | US$ in thousands | 1,915,370 | 983,344 | 864,516 | 821,765 | 687,468 |
| Total current liabilities | US$ in thousands | 392,347 | 159,204 | 140,164 | 120,792 | 111,403 |
| Working capital turnover | 1.03 | 1.24 | 1.32 | 1.13 | 1.36 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $1,568,480K ÷ ($1,915,370K – $392,347K)
= 1.03
Working capital turnover measures how efficiently a company generates revenue relative to its working capital. Globus Medical Inc's working capital turnover has fluctuated over the past five years. In 2023, the working capital turnover was 1.03, down from 1.24 in 2022 and 1.32 in 2021. This indicates a decrease in the efficiency of generating revenue relative to its current assets in 2023 compared to the previous two years.
Furthermore, the working capital turnover was 1.13 in 2020 and 1.36 in 2019, showing some fluctuation in efficiency over the five-year period. A higher working capital turnover is generally preferred as it indicates that the company is utilizing its working capital more effectively to generate sales.
In summary, the downward trend in Globus Medical Inc's working capital turnover from 2021 to 2023 may suggest that the company is becoming less efficient in generating revenue relative to its working capital. It would be advisable for the company to evaluate its working capital management practices to improve efficiency and profitability.
Peer comparison
Dec 31, 2023