Jazz Pharmaceuticals PLC (JAZZ)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	3,809,840	3,569,430	2,999,690	2,284,420	2,097,480
Total current assets	US$ in thousands	3,435,430	2,606,140	2,611,330	2,839,570	1,630,270
Total current liabilities	US$ in thousands	1,536,690	933,193	809,303	653,745	364,490
Working capital turnover		2.01	2.13	1.66	1.05	1.66

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $3,809,840K ÷ ($3,435,430K – $1,536,690K)
= 2.01

Working capital turnover is an important financial ratio that indicates how efficiently a company is utilizing its working capital to generate sales. Jazz Pharmaceuticals plc's working capital turnover has fluctuated over the past five years as follows:

- In 2023, the working capital turnover was 2.02, showing a slight decrease from the previous year's ratio of 2.19. This indicates that the company generated $2.02 in sales for every dollar of working capital investment.

- The ratio in 2021 was 1.72, lower than the ratios in 2022 and 2019, suggesting a decrease in efficiency in utilizing working capital.

- In 2020, the working capital turnover was 1.08, the lowest among the five years, indicating that the company generated $1.08 in sales for every dollar of working capital investment. This may suggest less efficient management of working capital during that period.

- The ratio increased to 1.71 in 2019, showing improved efficiency in utilizing working capital compared to 2020 but still lower than the ratios in 2022 and 2023.

Overall, Jazz Pharmaceuticals plc's working capital turnover has shown fluctuations over the past five years, with varying levels of efficiency in utilizing working capital to generate sales. It is crucial for the company to closely monitor and manage its working capital to ensure optimal operational performance and financial health.