Avantor Inc (AVTR)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	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
Cost of revenue (ttm)	US$ in thousands	4,504,300	4,533,000	4,524,600	4,557,200	4,603,400	4,631,500	4,695,700	4,804,600	4,909,600	4,989,200	5,001,800	4,971,100	4,883,400	4,832,600	4,712,800	4,468,800	4,313,100	4,147,400	4,078,600	4,131,800
Inventory	US$ in thousands	731,500	779,600	795,600	810,600	828,100	850,300	890,400	904,000	913,500	905,000	922,500	896,000	872,000	844,000	840,900	777,700	739,600	729,800	737,800	686,100
Inventory turnover		6.16	5.81	5.69	5.62	5.56	5.45	5.27	5.31	5.37	5.51	5.42	5.55	5.60	5.73	5.60	5.75	5.83	5.68	5.53	6.02

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $4,504,300K ÷ $731,500K
= 6.16

The inventory turnover ratio provides insight into how efficiently a company is managing its inventory. It measures the number of times a company sells and replaces its inventory during a specific period. For Avantor Inc, the inventory turnover ratios have shown some fluctuations over the years, ranging from 5.27 to 6.16.

From March 31, 2020, to December 31, 2024, the inventory turnover ratio generally trended upwards initially, peaking at 6.16 by the end of December 2024. This indicates that Avantor Inc was selling and replenishing its inventory more frequently, which could suggest effective inventory management practices.

However, it's important to note that a higher inventory turnover ratio doesn't always equate to better performance. A very high ratio could indicate insufficient inventory levels, leading to potential stockouts and lost sales. Conversely, a low ratio may signal excess inventory, tying up capital and increasing carrying costs.

Overall, while an increasing trend in inventory turnover is usually a positive sign, further analysis considering industry benchmarks and specific business circumstances is necessary to fully evaluate the efficiency of Avantor Inc's inventory management.