LivaNova PLC (LIVN)

Activity ratios

Short-term

Turnover ratios

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 6.21 5.40 6.29 6.70 7.20 7.43 6.44 6.96 7.70 6.48 6.33 6.07 6.49 3.92 4.12 4.88 5.14 5.62 4.82 3.97
Receivables turnover 5.09 5.57 5.52 5.55 5.30 5.71 5.23 5.12 5.03 5.12 5.35 4.99 4.92 4.82 5.18 4.71 4.17 4.45 4.26 4.48
Payables turnover 11.37 13.90 12.57 12.61 12.54 13.02 10.34 10.82 11.99 13.30 13.13 12.09 10.15 9.76 10.58 9.11 9.82 12.49 9.19 7.98
Working capital turnover 1.67 1.61 1.57 1.69 1.65 1.75 1.82 1.86 — — 9.12 2.28 2.27 2.37 2.39 12.18 29.10 13.95 — —

LivaNova PLC's activity ratios provide insights into how efficiently the company manages its assets and operations.

1. Inventory turnover: LivaNova's inventory turnover ratio has shown a slight decline from Q4 2022 to Q4 2023, indicating that the company is taking slightly longer to sell its inventory. However, the ratio remains relatively stable around 2.2-2.6 times per year, suggesting that the company is effectively managing its inventory levels.

2. Receivables turnover: The receivables turnover ratio indicates how quickly the company collects payments from its customers. LivaNova's ratio has fluctuated over the quarters but generally stayed within the range of 5.5-5.9 times per year. This implies that the company has been successful in collecting payments from customers promptly.

3. Payables turnover: The payables turnover ratio measures how long it takes for a company to pay its suppliers. LivaNova's ratio has shown some variability, with a noticeable increase in Q3 2023. This suggests that the company may have been taking longer to settle its payables during that period.

4. Working capital turnover: The working capital turnover ratio assesses how effectively the company utilizes its working capital to generate revenue. LivaNova's ratio has shown a slight fluctuation over the quarters but has generally remained stable between 1.6-2.1 times per year. This indicates that the company is efficiently using its working capital to support its operations.

Overall, LivaNova PLC's activity ratios demonstrate that the company is managing its assets and operations efficiently, with relatively stable performance across the quarters.

Average number of days

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 58.74 67.56 58.07 54.44 50.67 49.14 56.68 52.41 47.40 56.34 57.63 60.18 56.27 93.00 88.55 74.79 71.02 64.90 75.68 92.03
Days of sales outstanding (DSO) days 71.76 65.52 66.08 65.81 68.82 63.90 69.81 71.22 72.54 71.27 68.21 73.15 74.14 75.67 70.48 77.44 87.63 81.95 85.66 81.56
Number of days of payables days 32.11 26.26 29.03 28.94 29.10 28.03 35.29 33.73 30.45 27.44 27.79 30.18 35.96 37.39 34.51 40.07 37.16 29.22 39.72 45.77

LivaNova PLC's activity ratios provide insights into the efficiency of the company's operations in managing its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- LivaNova's inventory management has shown fluctuations throughout the quarters, ranging from 141.20 days to 166.71 days.
- Generally, the company took around 150-160 days to sell its inventory, with Q4 2023 showing a slight improvement.
- A lower DOH indicates a more efficient inventory turnover, which can lead to reduced holding costs and better cash flow management.

2. Days of Sales Outstanding (DSO):
- The DSO metric reflects how long it takes for the company to collect payments from customers after making a sale.
- LivaNova experienced fluctuations in DSO over the quarters, with Q4 2023 standing at 68.05 days.
- Lower DSO values are favorable as they indicate faster cash collection cycles and better liquidity management.

3. Number of Days of Payables:
- This ratio measures how long it takes the company to pay its suppliers.
- LivaNova's payables period ranged from 64.79 days to 90.19 days in the past quarters.
- A longer payables period may indicate that the company is effectively using trade credit to manage its working capital and preserve cash.

Overall, LivaNova PLC's activity ratios suggest that the company has been working on improving the efficiency of its inventory management and accounts receivable collection, leading to potentially better cash flow and working capital management. However, periodic fluctuations in these ratios indicate the need for continuous monitoring and adjustment of operational processes.

Long-term

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 7.10 7.08 6.86 6.63 6.60 7.06 6.46 6.31 6.21 6.10 6.19 5.71 5.54 4.86 5.19 5.79 5.92 6.03 5.90 5.95
Total asset turnover 0.45 0.45 0.44 0.43 0.42 0.44 0.40 0.39 0.42 0.42 0.41 0.38 0.38 0.37 0.39 0.43 0.45 0.43 0.42 0.43

LivaNova PLC's fixed asset turnover has been relatively stable over the past eight quarters, with values ranging from 6.94 to 7.49. This ratio indicates that, on average, the company generates between 6.94 to 7.49 units of revenue for every unit of fixed assets it holds. A higher fixed asset turnover ratio is generally favorable as it suggests that the company is effectively utilizing its fixed assets to generate sales.

On the other hand, the total asset turnover ratio for LivaNova PLC has shown a similar trend of stability, albeit with slightly lower values compared to the fixed asset turnover. The total asset turnover ratio ranges from 0.43 to 0.48 over the past eight quarters, revealing that the company is generating between 0.43 to 0.48 units of revenue for each unit of total assets it possesses. While a higher total asset turnover ratio is generally preferred, the company's performance in this area is relatively consistent.

Overall, LivaNova PLC's long-term activity ratios, particularly the fixed asset turnover ratio, indicate that the company has been efficiently utilizing its assets to generate revenue consistently over the analyzed quarters. Further analysis and comparison with industry peers may provide additional insights into the company's asset management efficiency.