Jazz Pharmaceuticals PLC (JAZZ)

Short-term

Turnover ratios

Jazz Pharmaceuticals PLC's inventory turnover ratio has exhibited fluctuations over the years, starting at 1.44 in March 2020 and reaching its peak at 1.64 in September 2024. This ratio indicates the number of times inventory is sold and replaced during a specific period, with higher values generally being more favorable as they suggest efficient management of inventory levels.

On the other hand, the receivables turnover ratio data is not provided, making it challenging to assess how quickly the company is collecting its accounts receivable. A higher receivables turnover ratio would indicate that the company is efficient in collecting outstanding payments from its customers.

Similarly, payables turnover information is missing, preventing an evaluation of how quickly the company pays its suppliers. A higher payables turnover ratio would suggest that the company is effectively managing its trade credit and may indicate strong supplier relationships.

The working capital turnover ratio, which reflects how efficiently the company is utilizing its working capital to generate revenue, has shown varying trends. The ratio increased from 1.95 in March 2020 to a peak of 2.27 in September 2023, before declining to 1.13 in December 2024. A higher ratio suggests that the company is effectively utilizing its working capital to support its operational activities.

Overall, it is essential for Jazz Pharmaceuticals PLC to monitor and manage these activity ratios effectively to ensure optimal inventory management, timely collection of receivables, and efficient working capital utilization.

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Average number of days

Over the period from March 31, 2020, to December 31, 2024, Jazz Pharmaceuticals PLC experienced significant fluctuations in its Days of Inventory on Hand (DOH) ratio. The DOH ratio measures how many days a company takes to sell its average inventory.

Initially, the company's DOH was relatively high, peaking at 1,814.97 days on June 30, 2021, and 1,170.68 days on September 30, 2021. These unusually high figures suggest either inefficient inventory management or disruptions in the supply chain.

Subsequently, Jazz Pharmaceuticals managed to improve its inventory turnover efficiency, as indicated by a decreasing trend in the DOH ratio. By December 31, 2024, the DOH had decreased to 231.76 days, reflecting a more streamlined inventory management process.

However, without data on Accounts Receivable and Accounts Payable turnovers, it is challenging to provide a comprehensive analysis of the company's working capital management efficiency. The Days of Sales Outstanding (DSO) and Number of Days of Payables ratios are essential for a complete assessment of the company's liquidity and operational effectiveness.

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Long-term

The fixed asset turnover ratio for Jazz Pharmaceuticals PLC has shown an increasing trend from March 2020 to June 2022, indicating that the company is generating better sales from its fixed assets over time. However, there was a noticeable drop in the ratio in the following quarters. This may suggest that the company's efficiency in utilizing its fixed assets to generate sales has declined temporarily.

On the other hand, the total asset turnover ratio has been relatively stable over the same period, hovering around 0.30. This ratio indicates how efficiently the company is using all its assets to generate revenue. While it did show some fluctuations, the overall stability suggests that Jazz Pharmaceuticals PLC has been consistent in generating sales relative to its total assets.

It is important to monitor the trend of these ratios over time to assess the company's ability to efficiently utilize its assets for revenue generation and to identify any potential underlying issues that may impact its long-term profitability and performance.