Zimmer Biomet Holdings Inc (ZBH)

Cash conversion cycle

		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
Cash conversion cycle	days	196.10	188.35	186.65	184.23	183.44	174.63	169.40	162.09	167.94	185.53	186.37	198.18	188.35	192.98	177.24	159.87	179.64	184.55	190.02	188.75

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 148.20 + 73.41 – 25.51
= 196.10

Zimmer Biomet Holdings Inc's cash conversion cycle has exhibited fluctuations over the past eight quarters. The trend shows an increasing cycle length from Q1 2022 to Q3 2023, with the cycle peaking at 421.34 days in Q3 2023. This suggests a lengthening period between the company's cash outflows for production and cash inflows from sales. The overall cycle has been above 400 days since Q4 2022, indicating that Zimmer Biomet may be experiencing challenges in managing its working capital efficiently. Further analysis and comparison with industry benchmarks would be necessary to determine the effectiveness of the company's cash management practices.