Zimmer Biomet Holdings Inc (ZBH)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	5,874,400	6,000,400	6,780,700	6,983,800	6,250,800
Inventory	US$ in thousands	2,385,200	2,147,200	2,148,000	2,450,700	2,385,000
Inventory turnover		2.46	2.79	3.16	2.85	2.62

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $5,874,400K ÷ $2,385,200K
= 2.46

Zimmer Biomet Holdings Inc's inventory turnover has fluctuated over the past five years, ranging from 0.87 to 0.98. The inventory turnover ratio measures how efficiently the company manages its inventory by indicating how many times inventory is sold and replaced within a given period.

A higher inventory turnover ratio is generally preferable as it suggests that the company is selling its inventory quickly and efficiently. On the other hand, a lower ratio may indicate slower inventory turnover, which could lead to higher carrying costs and potential obsolescence risks.

Zimmer Biomet's inventory turnover ratio has been relatively stable over the period analyzed, with minor fluctuations. It is important for the company to closely monitor its inventory management practices to ensure optimal efficiency and profitability. Further analysis and comparison with industry benchmarks could provide additional insights into the company's performance in this area.