Abbott Laboratories (ABT)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 31,388,000 | 32,920,000 | 31,963,000 | 26,867,000 | 24,932,000 |
| Inventory | US$ in thousands | 6,570,000 | 6,173,000 | 5,157,000 | 5,012,000 | 4,316,000 |
| Inventory turnover | 4.78 | 5.33 | 6.20 | 5.36 | 5.78 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $31,388,000K ÷ $6,570,000K
= 4.78
Abbott Laboratories' inventory turnover has fluctuated over the past five years, ranging from a low of 2.74 in 2023 to a high of 3.59 in 2021. This ratio measures how efficiently the company is managing its inventory by indicating how many times it sells and replaces its inventory in a given period.
A higher inventory turnover ratio generally indicates that the company is selling its products quickly and efficiently. In the case of Abbott Laboratories, the decrease in inventory turnover from 2021 to 2023 may suggest that the company is holding onto its inventory longer before selling it, which could tie up capital and impact profitability.
It is important for Abbott Laboratories to carefully monitor and manage its inventory turnover to ensure optimal efficiency in its operations. Further analysis of the company's inventory management practices and industry benchmarks could provide insights into potential areas for improvement.
Peer comparison
Dec 31, 2023