Zimmer Biomet Holdings Inc (ZBH)

Working capital turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	US$ in thousands	7,171,400	6,780,400	7,459,000	6,789,700	7,751,900
Total current assets	US$ in thousands	4,609,500	4,427,300	4,885,000	5,083,300	4,723,900
Total current liabilities	US$ in thousands	2,857,400	2,358,200	3,467,900	2,556,900	3,441,500
Working capital turnover		4.09	3.28	5.26	2.69	6.04

December 31, 2023 calculation

Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $7,171,400K ÷ ($4,609,500K – $2,857,400K)
= 4.09

The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate revenue. A higher ratio indicates better efficiency in managing working capital.

Zimmer Biomet Holdings Inc's working capital turnover has fluctuated over the past five years, ranging from 2.78 to 6.22. The trend shows some volatility in the company's ability to efficiently leverage its working capital.

In 2021, the ratio was 5.53, suggesting that for every dollar of working capital employed, the company generated $5.53 in revenue. This indicates a relatively efficient use of working capital that year.

In 2020, the ratio dropped to 2.78, indicating a decrease in efficiency in utilizing working capital to generate revenue compared to the previous year.

In 2019, the ratio increased significantly to 6.22, showcasing a high level of efficiency in converting working capital into revenue.

Overall, Zimmer Biomet Holdings Inc's working capital turnover has shown variability, with some years demonstrating better efficiency than others. Further analysis of the company's financial performance and operational activities would be necessary to understand the drivers behind these fluctuations and identify areas for improvement.