Abbott Laboratories (ABT)

Inventory turnover

		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
Cost of revenue (ttm)	US$ in thousands	31,388,000	31,708,000	31,742,000	32,218,000	32,920,000	32,724,000	32,056,000	31,532,000	30,940,000	30,164,000	29,242,000	27,108,000	25,804,000	24,527,000	24,057,000	24,231,000	23,965,000	23,673,000	23,418,000	23,453,000
Inventory	US$ in thousands	6,570,000	6,650,000	6,871,000	6,673,000	6,173,000	5,734,000	5,899,000	5,691,000	5,157,000	5,261,000	5,439,000	5,387,000	5,012,000	5,152,000	5,202,000	4,568,000	4,316,000	4,392,000	4,352,000	4,085,000
Inventory turnover		4.78	4.77	4.62	4.83	5.33	5.71	5.43	5.54	6.00	5.73	5.38	5.03	5.15	4.76	4.62	5.30	5.55	5.39	5.38	5.74

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $31,388,000K ÷ $6,570,000K
= 4.78

Abbott Laboratories' inventory turnover has shown a declining trend over the past eight quarters, starting at 3.36 in Q1 2022 and gradually decreasing to 2.77 in Q1 2023. This indicates that the company is taking longer to sell its inventory on hand. A lower inventory turnover ratio could imply excess inventory levels, slow-moving products, or issues with demand forecasting.

It is important to note that a consistently low inventory turnover ratio could tie up working capital and lead to higher carrying costs. Management should closely monitor and analyze the reasons behind the decreasing trend in inventory turnover to optimize inventory management practices and improve operational efficiency.