Alkermes Plc (ALKS)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019
Cost of revenue (ttm)	US$ in thousands	721,001	768,818	770,818	985,525	952,143	892,530	860,255	863,254	846,075	830,095	796,512	771,471	756,781	741,926	756,643	571,378	591,872	616,264	622,486	821,602
Inventory	US$ in thousands	194,731	198,369	186,406	192,186	189,372	184,984	181,418	166,296	155,608	154,786	150,335	138,696	136,077	134,178	125,738	122,823	116,458	109,314	101,803	100,987
Inventory turnover		3.70	3.88	4.14	5.13	5.03	4.82	4.74	5.19	5.44	5.36	5.30	5.56	5.56	5.53	6.02	4.65	5.08	5.64	6.11	8.14

June 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $721,001K ÷ $194,731K
= 3.70

Inventory turnover measures how efficiently a company manages its inventory by evaluating how many times it sells and replaces its inventory during a specific period. Alkermes Plc's inventory turnover has shown fluctuations over the past few quarters, ranging from a low of 3.70 to a high of 8.14.

A higher inventory turnover ratio indicates that the company is selling goods quickly and efficiently, reducing the risk of obsolete inventory and improving cash flow. Conversely, a lower ratio may suggest overstocking, slow sales, or inefficient inventory management.

In Alkermes Plc's case, the inventory turnover has generally been healthy, hovering around the 5 to 6 range over the period analyzed. This implies that the company is effectively managing its inventory levels, keeping them at optimal levels to meet demand without excessive overstocking. The slight fluctuations may be due to seasonal shifts in sales, changes in production processes, or variations in demand for their products.

Overall, a consistent and efficient inventory turnover ratio indicates good management practices within Alkermes Plc's supply chain and operations, contributing to the company's overall financial health and performance.