Zimmer Biomet Holdings Inc (ZBH)

Activity ratios

Short-term

Turnover ratios

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
Inventory turnover 2.74 2.54 2.51 2.48 2.46 2.65 2.67 2.69 2.79 2.90 3.03 3.12 3.16 2.65 2.63 2.53 2.85 2.59 2.59 2.77
Receivables turnover 5.02 4.98 5.14 4.99 4.97 5.26 5.12 5.02 4.91 5.34 5.51 5.81 5.30 5.54 5.44 5.02 4.71 5.13 6.43 7.31
Payables turnover 31.44 18.67 17.44 15.97 14.31 19.23 17.15 15.20 16.95 18.46 20.93 20.66 22.12 20.39 18.44 19.25 21.16 19.30 17.79 16.88
Working capital turnover 3.35 5.70 7.07 3.93 4.09 3.07 3.25 3.34 3.28 3.05 3.53 3.96 5.26 3.25 3.18 2.38 2.71 2.38 2.69 2.93

Zimmer Biomet Holdings Inc's Inventory turnover has shown a fluctuating trend over the past five years, ranging from a low of 2.46 at the end of December 2023 to a high of 3.16 at the end of December 2021. This indicates that, on average, the company has been able to convert its inventory into sales approximately 2.7 to 3.2 times per year during this period.

In terms of Receivables turnover, the company has demonstrated a decreasing trend, with a peak of 7.31 at the end of March 2020, dropping to a low of 4.97 at the end of December 2023. This suggests that the collection period for its receivables has lengthened over the years, indicating potential difficulties in collecting payments from customers in a timely manner.

The Payables turnover ratio for Zimmer Biomet Holdings Inc has shown a mix of increasing and decreasing trends. The company's ability to settle its payables improved from a low of 14.31 at the end of December 2023 to a high of 31.44 at the end of December 2024. A higher payables turnover ratio can indicate that the company is taking longer to pay its suppliers, potentially benefiting from more favorable credit terms.

Regarding the Working capital turnover ratio, the company has experienced fluctuations but with an overall increasing trend. The ratio spiked to a peak of 7.07 at the end of June 2024 from a low of 2.38 at the end of September 2020. This indicates that Zimmer Biomet Holdings Inc has become more effective in utilizing its working capital to generate revenue over the years.

In conclusion, Zimmer Biomet Holdings Inc's activity ratios reflect varying efficiencies in managing its inventory, receivables, payables, and working capital over the past five years. It is important for the company to monitor these ratios closely to identify areas for improvement and enhance operational performance.

Average number of days

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
Days of inventory on hand (DOH) days 133.37 143.66 145.14 147.37 148.20 137.97 136.57 135.55 130.61 126.06 120.56 116.95 115.63 137.59 139.03 144.37 128.08 140.78 140.95 131.57
Days of sales outstanding (DSO) days 72.70 73.34 71.00 73.18 73.41 69.37 71.36 72.69 74.37 68.35 66.27 62.79 68.81 65.85 67.13 72.77 77.51 71.11 56.80 49.93
Number of days of payables days 11.61 19.55 20.93 22.85 25.51 18.99 21.28 24.02 21.54 19.77 17.44 17.66 16.50 17.90 19.79 18.96 17.25 18.91 20.52 21.63

Zimmer Biomet Holdings Inc's activity ratios provide insights into the efficiency of its operations.

1. Days of Inventory on Hand (DOH): The company's DOH indicates an improvement from 131.57 days as of March 31, 2020, to 133.37 days by December 31, 2024. Generally, a lower DOH suggests better inventory management, but the slight increase in DOH may indicate a buildup of inventory or slower sales turnover in recent periods.

2. Days of Sales Outstanding (DSO): The DSO metric shows the average number of days it takes the company to collect payment after a sale. Zimmer Biomet's DSO decreased from 49.93 days as of March 31, 2020, to 72.70 days by December 31, 2024. An increase in DSO may indicate issues with collecting receivables efficiently or changes in payment terms that could impact cash flow.

3. Number of Days of Payables: The number of days of payables reflects the average number of days it takes the company to pay its suppliers. Zimmer Biomet's payables days increased from 21.63 days as of March 31, 2020, to 25.51 days by December 31, 2023, before dropping to 11.61 days by December 31, 2024. An increase in payables days may suggest the company is taking longer to settle its payables, possibly benefiting from extended payment terms or facing liquidity challenges.

Overall, a comprehensive analysis of these activity ratios can help stakeholders evaluate Zimmer Biomet's operational efficiency, working capital management, and potential liquidity concerns over the specified periods.

Long-term

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
Fixed asset turnover 3.63 3.50 3.47 3.45 3.48 3.47 3.54 3.64 3.62 3.79 3.93 3.99 4.06 3.84 3.85 3.42 3.34 3.37 3.33 3.68
Total asset turnover 0.35 0.34 0.34 0.34 0.33 0.33 0.33 0.33 0.32 0.32 0.33 0.34 0.32 0.32 0.32 0.29 0.28 0.29 0.29 0.30

Based on the long-term activity ratios of Zimmer Biomet Holdings Inc, we observe the following trends:

1. Fixed Asset Turnover: The company's fixed asset turnover ratio fluctuated over the years but generally remained within a range of 3.33 to 4.06. The ratio peaked at 4.06 on December 31, 2021, indicating that the company generated $4.06 in revenue for every $1 of fixed assets held. However, there was a slight decline in the ratio in the following periods.

2. Total Asset Turnover: Zimmer Biomet's total asset turnover ratio increased gradually from 0.29 on June 30, 2020, to 0.35 on December 31, 2024. This suggests that the company became more efficient in generating sales relative to its total assets over the period analyzed.

Overall, while the fixed asset turnover ratio fluctuated, the total asset turnover ratio showed a positive trend, indicating improved efficiency in asset utilization and sales generation for Zimmer Biomet Holdings Inc over the years.