Zimmer Biomet Holdings Inc (ZBH)

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	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	2.62	2.38	2.38	2.36
Receivables turnover	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	5.72	6.74	6.16	6.24
Payables turnover	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	15.59	15.82	16.05	15.13
Working capital turnover	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	6.09	12.35	10.76	3.41

Zimmer Biomet Holdings Inc's activity ratios reflect how efficiently the company manages its resources and operations.

1. Inventory turnover: The company's inventory turnover has been declining slightly over the past two years, from 1.09 in Q1 2022 to 0.87 in Q4 2023. This indicates that the company is holding onto its inventory for a longer period before selling it, which may tie up capital and increase carrying costs.

2. Receivables turnover: The receivables turnover ratio has been relatively stable, ranging from 5.02 in Q4 2022 to 5.43 in Q3 2023. A higher turnover ratio suggests that the company is efficient in collecting payments from customers, which is positive for cash flow management.

3. Payables turnover: The payables turnover ratio has also shown some fluctuation, with a decrease from 7.34 in Q2 2022 to 5.08 in Q4 2023. A lower ratio may indicate that the company is taking longer to pay its suppliers, which could impact relationships with vendors.

4. Working capital turnover: The working capital turnover has been moderate, ranging from 3.16 in Q3 2023 to 4.22 in Q4 2023. This ratio measures how effectively the company is using its working capital to generate sales. A higher turnover ratio implies that the company is efficiently utilizing its resources to generate revenue.

Overall, Zimmer Biomet Holdings Inc's activity ratios suggest that there may be room for improvement in managing inventory turnover and payables turnover to enhance operational efficiency and optimize working capital utilization.

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	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	139.27	153.42	153.47	154.39
Days of sales outstanding (DSO)	days	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	63.78	54.19	59.29	58.49
Number of days of payables	days	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	23.41	23.07	22.75	24.13

Activity ratios provide insights into how efficiently a company manages its assets and liabilities to generate sales. Let's analyze the activity ratios of Zimmer Biomet Holdings Inc based on the data provided:

1. Days of Inventory on Hand (DOH):
- DOH shows how many days, on average, inventory is held before being sold.
- The trend shows an increasing number of days over the quarters, indicating that inventory turnover is decreasing.
- This may imply either excess inventory levels or a slowdown in sales, which could tie up working capital and increase holding costs.

2. Days of Sales Outstanding (DSO):
- DSO measures the average number of days it takes to collect revenue after a sale is made.
- The trend is fluctuating but generally stable, with a slight increase over recent quarters.
- A higher DSO suggests slower collection of receivables, impacting cash flow and liquidity.

3. Number of Days of Payables:
- This metric signifies how long the company takes to pay its suppliers.
- The data reveals fluctuations in payables days, with periods of increase and decrease.
- Longer payables days may indicate a more favorable liquidity position, allowing the company to hold onto cash longer before settling debts.

Overall, Zimmer Biomet's activity ratios suggest potential challenges in managing inventory levels efficiently and collecting receivables promptly. Further analysis and comparison with industry benchmarks would provide a more comprehensive assessment of the company's performance in these areas.

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	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	3.76	3.77	3.77	3.80
Total asset turnover	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	0.32	0.32	0.32	0.31

Zimmer Biomet Holdings Inc's long-term activity ratios indicate the company's efficiency in managing its assets. The fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging from 3.58 to 4.19. This ratio measures how effectively the company is generating sales from its fixed assets, such as property, plant, and equipment. A higher fixed asset turnover ratio implies that the company is using its fixed assets efficiently to generate revenue.

On the other hand, the total asset turnover ratio has also remained consistent around 0.34 to 0.35 during the same period. This ratio reflects the company's ability to generate sales from all its assets, including both fixed and current assets. A higher total asset turnover ratio indicates that the company is utilizing all its assets more effectively to generate revenue.

Overall, Zimmer Biomet Holdings Inc's long-term activity ratios suggest that the company has been reasonably efficient in utilizing both its fixed and total assets to generate sales over the past eight quarters. These stable ratios indicate a consistent level of asset utilization, which is a positive sign for the company's operational efficiency.