Jazz Pharmaceuticals PLC (JAZZ)

Working capital turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Revenue US$ in thousands 4,068,950 3,834,200 3,659,370 3,094,240 2,363,570
Total current assets US$ in thousands 4,629,030 3,435,430 2,606,140 2,611,330 2,839,570
Total current liabilities US$ in thousands 1,038,570 1,536,690 933,193 809,303 653,745
Working capital turnover 1.13 2.02 2.19 1.72 1.08

December 31, 2024 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $4,068,950K ÷ ($4,629,030K – $1,038,570K)
= 1.13

The working capital turnover ratio for Jazz Pharmaceuticals PLC has shown a fluctuating trend over the five-year period from 2020 to 2024. The ratio increased from 1.08 in 2020 to 2.19 in 2022, indicating a significant improvement in the company's ability to efficiently utilize its working capital to generate revenue. However, in 2023, the ratio slightly decreased to 2.02 before dropping significantly to 1.13 in 2024.

This fluctuation suggests that Jazz Pharmaceuticals PLC may have experienced varying levels of efficiency in managing its working capital during the period under review. While a higher working capital turnover ratio typically indicates more effective management of working capital in relation to sales, the sudden decrease in 2024 raises concerns about the company's ability to sustain this efficiency.

Further analysis of the underlying factors impacting working capital turnover, such as changes in inventory management, accounts receivable collection, and accounts payable practices, would provide valuable insights into the company's overall financial health and operational efficiency.