Globus Medical (GMED)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 213.90 | 232.44 | 292.39 | 398.01 | 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 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 213.90 | 232.44 | 292.39 | 398.01 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 213.90 + — – —
= 213.90
The cash conversion cycle of Globus Medical has shown fluctuations over the period from March 31, 2020, to December 31, 2024. In the beginning, the company's cash conversion cycle was relatively high at around 400 days, indicating that it took a considerable amount of time for Globus Medical to convert its investments in inventory and other resources back into cash.
However, there was a noticeable improvement in the cash conversion cycle from June 30, 2021, to December 31, 2024, where the days decreased significantly to around 200-300 days. This suggests that the company was able to manage its working capital more effectively during this period, leading to a faster conversion of assets into cash.
The sudden spike in the cash conversion cycle to 935 days on September 30, 2023, could be a cause for concern, as it indicates a significant delay in the company's ability to convert its assets into cash. This could be attributed to various factors such as inefficient inventory management, slow collection of receivables, or extended payment terms to suppliers.
Overall, Globus Medical's cash conversion cycle trend shows both positive and concerning aspects, highlighting the importance of closely monitoring working capital management to ensure efficient operations and cash flow.
Peer comparison
Dec 31, 2024