Globus Medical (GMED)

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 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Revenue (ttm) US$ in thousands 1,568,476 1,226,440 1,096,949 1,068,982 1,022,843 998,366 973,939 961,307 958,102 941,526 927,903 825,809 789,042 767,264 747,381 792,998 785,368 769,639 742,660 721,505
Total current assets US$ in thousands 1,915,370 1,917,340 1,210,010 1,070,430 983,344 920,001 891,168 916,598 864,516 980,514 891,998 814,373 821,765 811,951 696,891 641,800 687,468 637,063 583,933 617,568
Total current liabilities US$ in thousands 392,347 428,722 155,220 167,547 159,204 145,255 146,017 141,491 140,164 122,525 130,042 123,677 120,792 99,980 106,126 97,962 111,403 94,921 84,184 79,492
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

December 31, 2023 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,568,476K ÷ ($1,915,370K – $392,347K)
= 1.03

The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales. It is calculated by dividing net sales by average working capital. A higher ratio indicates better efficiency in utilizing working capital.

Analyzing the working capital turnover ratios of Globus Medical Inc over the past eight quarters, we observe some fluctuations in the ratio. In Q4 2023, the ratio stands at 1.03, which indicates that the company generated $1.03 in revenue for every dollar of working capital invested during the quarter. This figure is lower compared to the previous quarter but higher than in Q3 and Q2 of 2023.

The downward trend from Q1 to Q3 2023 might suggest that the company's efficiency in utilizing working capital to generate sales temporarily decreased. However, the ratio improved in Q4 2023 compared to the preceding quarters.

Looking at the trend over the past year, the working capital turnover ratio has shown some variability, with peaks in Q2 and Q3 of 2022. This could reflect changes in the company's operational efficiency and how effectively it manages its working capital to support revenue generation.

Overall, the working capital turnover ratios of Globus Medical Inc indicate fluctuations in the efficiency of utilizing working capital to drive sales, with the most recent quarter showing a slight improvement compared to the preceding quarters. Further analysis of the company's working capital management practices and operational performance may provide additional insights into these fluctuations.