LivaNova PLC (LIVN)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.30 | 7.30 | 7.82 | 8.73 | 4.43 |
| Receivables turnover | 5.09 | 5.32 | 4.98 | 4.85 | 4.15 |
| Payables turnover | 11.52 | 12.72 | 12.17 | 13.66 | 8.46 |
| Working capital turnover | 1.67 | 1.65 | — | 2.24 | 28.98 |
LivaNova PLC's activity ratios provide insights into the efficiency of its operations and management of its working capital.
- Inventory turnover has shown a slight improvement over the years, increasing from 1.97 in 2019 to 2.59 in 2023. This indicates that the company is managing its inventory more efficiently, taking less time to sell its inventory.
- Receivables turnover has been relatively stable, with a slight decrease from 5.58 in 2022 to 5.36 in 2023. This suggests that LivaNova is collecting its receivables at a steady pace, maintaining a healthy balance between credit sales and collections.
- Payables turnover has shown a consistent upward trend, improving from 3.77 in 2019 to 4.73 in 2023. This indicates that the company is managing its payables effectively, possibly negotiating better credit terms with suppliers.
- Working capital turnover has fluctuated significantly, with a sharp decrease from 29.39 in 2019 to 1.77 in 2023. The drastic drop may be attributed to changes in the company's working capital management strategy or business operations.
Overall, LivaNova PLC's activity ratios reflect a mixed performance in managing its operations and working capital efficiently. Management should continue to monitor these ratios to ensure optimal utilization of resources and improve overall business performance.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 57.94 | 49.97 | 46.67 | 41.82 | 82.47 |
| Days of sales outstanding (DSO) | days | 71.76 | 68.62 | 73.24 | 75.20 | 88.01 |
| Number of days of payables | days | 31.67 | 28.70 | 29.98 | 26.72 | 43.15 |
Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Let's analyze LivaNova PLC's activity ratios:
1. Days of Inventory on Hand (DOH):
Dec 31, 2023: 141.20 days
Dec 31, 2022: 150.12 days
Dec 31, 2021: 117.29 days
Dec 31, 2020: 150.09 days
Dec 31, 2019: 185.14 days
The trend in DOH shows a slight improvement from 2019 to 2021, indicating better inventory management. However, the increase in 2022 and decrease in 2023 suggest some variability in managing inventory levels.
2. Days of Sales Outstanding (DSO):
Dec 31, 2023: 68.05 days
Dec 31, 2022: 65.41 days
Dec 31, 2021: 65.34 days
Dec 31, 2020: 72.03 days
Dec 31, 2019: 86.78 days
The decreasing trend in DSO over the years indicates that LivaNova is collecting its receivables more efficiently, with a significant improvement from 2019 to 2023.
3. Number of Days of Payables:
Dec 31, 2023: 77.19 days
Dec 31, 2022: 86.22 days
Dec 31, 2021: 75.36 days
Dec 31, 2020: 87.28 days
Dec 31, 2019: 96.87 days
The decreasing trend in the number of days of payables implies that the company is taking less time to pay its suppliers, indicating an improvement in managing its payables.
In conclusion, LivaNova PLC has shown improvements in managing inventory and payables, along with more efficient collections from customers as evidenced by decreasing DSO. These trends suggest enhanced efficiency and effectiveness in the company's operational activities.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 7.10 | 6.62 | 6.16 | 5.46 | 5.89 |
| Total asset turnover | 0.45 | 0.42 | 0.42 | 0.37 | 0.44 |
The fixed asset turnover for LivaNova PLC has shown a consistent upward trend over the past five years, indicating that the company is generating more revenue from its fixed assets. This suggests that LivaNova is effectively utilizing its long-term assets to generate sales.
On the other hand, the total asset turnover has fluctuated slightly over the same period, with a peak in 2021 and a slight decline in 2023. This ratio indicates how efficiently the company is using all its assets to generate revenue. Despite the fluctuations, the total asset turnover for LivaNova remains relatively low, suggesting that there is room for improvement in optimizing the company's overall asset utilization.
In conclusion, while LivaNova PLC is effectively utilizing its fixed assets to generate sales, there is potential for the company to enhance its overall asset turnover efficiency to drive greater revenue generation.