Alkermes Plc (ALKS)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	984,446	860,255	796,512	756,643	833,593
Inventory	US$ in thousands	186,406	181,418	150,335	125,738	101,803
Inventory turnover		5.28	4.74	5.30	6.02	8.19

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $984,446K ÷ $186,406K
= 5.28

The inventory turnover of Alkermes plc has shown fluctuating trends over the past five years. It decreased from 1.77 in 2019 to 1.42 in 2020, indicating a slower rate of inventory turnover. However, there was a further decline to 1.31 in 2021 before slightly increasing to 1.20 in 2022. The most recent data for 2023 shows a slight improvement with an inventory turnover of 1.36.

A lower inventory turnover ratio suggests that the company is holding onto its inventory for a longer period before selling it, which could tie up capital and result in higher carrying costs. It may also indicate potential issues such as overstocking or slow-moving inventory. Conversely, a higher turnover ratio implies that the company is more efficient in managing its inventory and quickly converting it into sales.

Overall, Alkermes plc's inventory turnover has been somewhat volatile, and it would be beneficial for stakeholders to monitor this ratio closely to assess the company's inventory management efficiency and potential impact on its financial performance.