Jazz Pharmaceuticals PLC (JAZZ)

Short-term

Turnover ratios

Activity ratios provide insights into how efficiently a company is managing its assets and operations. Let's analyze the activity ratios of Jazz Pharmaceuticals PLC based on the provided data:

1. Inventory Turnover:
- The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period. A higher ratio indicates efficient inventory management.
- Jazz Pharmaceuticals' inventory turnover declined from 1.56 in 2020 to 0.41 in 2021 but showed improvement in the following years, reaching 0.93 in 2024.
- The significant decrease in 2021 may suggest potential issues with inventory management, but the subsequent increase indicates some improvement.

2. Receivables Turnover:
- The receivables turnover ratio measures how efficiently a company collects cash from its customers. A higher ratio indicates effective credit management.
- The data provided shows that Jazz Pharmaceuticals did not have specific values for receivables turnover for the years analyzed.
- The absence of data makes it challenging to assess how quickly Jazz Pharmaceuticals is collecting on its sales.

3. Payables Turnover:
- The payables turnover ratio reflects how quickly a company pays its suppliers. A higher ratio could suggest favorable credit terms or efficient cash management.
- Similar to receivables turnover, there is no data provided for payables turnover for Jazz Pharmaceuticals in the given period.
- Lack of payables turnover data limits the analysis of the company's payment practices and liquidity management.

4. Working Capital Turnover:
- The working capital turnover ratio indicates how efficiently a company utilizes its working capital to generate revenue. A higher ratio suggests effective working capital management.
- Jazz Pharmaceuticals' working capital turnover increased from 1.08 in 2020 to 2.19 in 2022 before declining to 1.13 in 2024.
- The fluctuation in the working capital turnover ratio may reflect changes in the company's operational efficiency and its ability to convert working capital into sales.

In conclusion, based on the activity ratios provided, Jazz Pharmaceuticals PLC has shown varied performance in managing its inventory and working capital over the analyzed period. However, the lack of data for receivables and payables turnover limits a comprehensive assessment of the company's overall efficiency in managing its working capital and relationships with suppliers and customers.

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Average number of days

Based on the provided data for Jazz Pharmaceuticals PLC, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The trend in DOH for Jazz Pharmaceuticals PLC shows significant fluctuations over the years.
- In 2021, the DOH increased sharply to 888.34 days, indicating that the company held inventory for a longer period, which could be due to various reasons such as changes in production, demand, or supply chain disruptions.
- Subsequently, in 2022, the DOH decreased to 482.19 days, suggesting an improvement in inventory management efficiency.
- However, in 2024, the DOH increased slightly to 393.44 days, indicating that the company may be carrying excess inventory compared to the previous year.

2. Days of Sales Outstanding (DSO):
- The data provided does not include information on Days of Sales Outstanding (DSO) for Jazz Pharmaceuticals PLC. DSO is a crucial ratio for measuring accounts receivable management effectiveness.

3. Number of Days of Payables:
- Similar to DSO, the data does not provide information on the Number of Days of Payables for Jazz Pharmaceuticals PLC. This metric is vital for assessing the company's ability to manage its accounts payable effectively and optimize cash flow.

In conclusion, while the information on Days of Inventory on Hand provides insights into Jazz Pharmaceuticals PLC's inventory management efficiency, the absence of data on Days of Sales Outstanding and Number of Days of Payables limits a comprehensive analysis of the company's overall activity ratios. It is essential for stakeholders to monitor all key activity ratios to evaluate the company's operational performance and financial health accurately.

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Long-term

The fixed asset turnover ratio measures how efficiently a company's fixed assets are being utilized to generate revenue. In the case of Jazz Pharmaceuticals PLC:

- The fixed asset turnover ratio decreased from 18.47 in 2020 to 9.01 in 2021, indicating a decline in the efficiency of utilizing fixed assets to generate sales.
- However, there was an improvement in the ratio in 2022, reaching a value of 12.14, which suggests a better utilization of fixed assets to generate revenue.
- The data for 2023 and 2024 is not available, so it's unknown how the ratio evolved in those years.

Total asset turnover ratio, on the other hand, measures how effectively a company is using its assets to generate revenue. Here's an analysis of Jazz Pharmaceuticals PLC based on this ratio:

- The total asset turnover ratio declined from 0.36 in 2020 to 0.25 in 2021, indicating a decrease in the efficiency of using total assets to generate sales.
- There was an improvement in the ratio in 2022, as it increased to 0.34, which signifies a better utilization of total assets to generate revenue.
- In 2023 and 2024, the total asset turnover ratio remained constant at 0.34, suggesting a consistent level of efficiency in utilizing total assets to generate sales.

Overall, despite the fluctuations observed in the fixed asset turnover ratio, there was an improvement in the total asset turnover ratio from 2021 to 2022. This indicates better efficiency in utilizing both fixed and total assets to generate revenue during the period under review.