Baxter International Inc (BAX)

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	15,888,000	15,894,000	18,405,000	17,889,000	18,000,000	17,497,000	13,585,000	12,714,000	11,536,000	7,891,000	7,667,000	7,400,000	7,227,000	6,400,000	6,252,000	6,322,000	6,198,000	9,230,000	9,238,000	9,167,000
Inventory	US$ in thousands	2,824,000	2,873,000	2,897,000	2,922,000	2,679,000	2,675,000	2,663,000	2,548,000	2,453,000	2,025,000	2,065,000	2,017,000	1,916,000	1,988,000	1,905,000	1,694,000	1,653,000	1,715,000	1,756,000	1,743,000
Inventory turnover		5.63	5.53	6.35	6.12	6.72	6.54	5.10	4.99	4.70	3.90	3.71	3.67	3.77	3.22	3.28	3.73	3.75	5.38	5.26	5.26

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $15,888,000K ÷ $2,824,000K
= 5.63

The inventory turnover ratio for Baxter International Inc. has shown consistency over the past eight quarters, ranging from 3.23 to 3.57. This indicates that the company is efficiently managing its inventory levels and converting its inventory into sales.

The average inventory turnover ratio for the past eight quarters is approximately 3.41. This suggests that, on average, Baxter International Inc. is able to sell and replace its inventory approximately 3.41 times within a year.

A high inventory turnover ratio generally signifies effective inventory management, as it implies that the company is not holding excess inventory that could lead to potential obsolescence or storage costs. Baxter International Inc.'s consistently moderate to high inventory turnover ratio indicates good inventory control practices and efficient operations.

However, it's essential to compare Baxter International Inc.'s inventory turnover ratio with industry peers to gain a more comprehensive understanding of its performance relative to industry standards. A declining trend in the inventory turnover ratio over time may indicate potential inefficiencies in managing inventory levels and could warrant further investigation into the company's supply chain and demand forecasting processes.