LivaNova PLC (LIVN)

Working capital turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Revenue (ttm)	US$ in thousands	1,207,181	1,181,723	1,134,930	1,096,381	1,093,987	1,057,777	1,026,749	989,010	971,142	983,022	925,125	933,289	932,621	932,112	974,900	901,723	907,604	925,639	964,065	1,062,089
Total current assets	US$ in thousands	1,127,190	1,093,110	1,046,690	1,040,020	988,158	953,867	941,835	903,017	886,136	851,222	771,927	809,623	679,181	646,355	809,102	690,630	708,044	673,136	672,439	616,922
Total current liabilities	US$ in thousands	392,125	324,402	302,986	327,771	334,983	295,396	288,164	316,129	297,398	288,016	263,893	307,914	696,970	658,465	702,248	295,356	309,052	281,759	268,364	529,724
Working capital turnover		1.64	1.54	1.53	1.54	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

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $1,207,181K ÷ ($1,127,190K – $392,125K)
= 1.64

The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate sales. A higher ratio indicates that the company is effectively managing its working capital, while a lower ratio may indicate inefficiency.

Based on the provided data for LivaNova PLC's working capital turnover, we observe the following trends:

1. The working capital turnover ratio peaked at 12.18 on March 31, 2020, indicating a high level of efficiency in utilizing working capital to generate revenue.
2. However, the ratio saw a significant decline in the subsequent quarters, dropping to around 2.39 - 2.37 from June 30, 2020, to December 31, 2020. This decline suggests that the company may have experienced challenges in efficiently managing its working capital during this period.
3. The ratio witnessed a spike to 9.12 on June 30, 2021, potentially signaling improved efficiency in working capital management.
4. Starting from March 31, 2022, the working capital turnover ratio showed a decreasing trend, reaching 1.54 on June 30, 2024. This decline indicates a potential decline in the company's ability to efficiently convert working capital into sales.
5. The consistency in the lower ratios from September 30, 2021, onwards may indicate a persistent challenge in effectively utilizing working capital to drive sales.

In conclusion, LivaNova PLC's working capital turnover ratio has displayed fluctuations over the years, with periods of high and low efficiency in converting working capital into revenue. Continuous monitoring and proactive management of working capital are crucial for the company to enhance its operational efficiency and financial performance.