Zimmer Biomet Holdings Inc (ZBH)

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 7,434,500 7,373,400 7,289,700 7,214,600 7,171,500 7,054,100 6,993,800 6,933,800 6,780,400 6,827,800 7,061,000 7,290,300 7,452,200 7,716,200 7,722,600 6,923,200 6,840,900 6,881,300 6,840,200 7,596,700
Total current assets US$ in thousands 4,671,500 4,864,000 4,639,400 4,631,500 4,609,500 4,372,000 4,387,900 4,411,900 4,427,300 4,534,400 4,462,900 4,516,800 4,885,000 5,312,400 5,356,800 5,000,100 5,083,300 5,152,600 4,706,800 6,370,900
Total current liabilities US$ in thousands 2,450,900 3,571,300 3,608,400 2,797,000 2,857,400 2,071,500 2,233,700 2,335,900 2,358,200 2,295,700 2,463,600 2,674,100 3,467,900 2,939,100 2,928,500 2,089,400 2,556,900 2,266,200 2,161,200 3,779,600
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

December 31, 2024 calculation

Working capital turnover = Revenue (ttm) ÷ (Total current assets – Total current liabilities)
= $7,434,500K ÷ ($4,671,500K – $2,450,900K)
= 3.35

The working capital turnover ratio measures how efficiently a company is utilizing its working capital to generate revenue. A higher ratio indicates more effective utilization of working capital.

Analyzing Zimmer Biomet Holdings Inc's working capital turnover over the last few quarters, we observe fluctuations in the ratio. The ratio was relatively stable in 2020, ranging from 2.38 to 2.93. However, there was a notable increase in the ratio in the second half of 2021, reaching 5.26 by December 31, 2021, implying a significant improvement in working capital efficiency.

Subsequently, the ratio continued to fluctuate, albeit at higher levels compared to previous years. It reached its peak at 7.07 on June 30, 2024, indicating a remarkable surge in efficiency in utilizing working capital to generate revenue. However, the ratio declined in the following quarters, settling at 3.35 by December 31, 2024.

Overall, Zimmer Biomet Holdings Inc's working capital turnover ratio has shown variability over the analyzed period, with some quarters demonstrating notably high efficiencies. Further analysis would be required to understand the specific factors driving these fluctuations and to assess the company's overall working capital management performance.