Chemed Corp (CHE)

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	1,870,822	1,858,538	1,827,504	1,782,998	1,738,704	1,720,507	1,720,962	1,740,619	1,746,185	1,739,638	1,735,814	1,728,159	1,718,415	1,719,241	1,696,703	1,657,520	1,631,172	1,577,681	1,545,151	1,521,696
Inventory	US$ in thousands	12,004	12,511	11,684	10,663	10,272	10,469	10,696	10,540	10,109	8,394	7,411	6,777	7,095	7,546	7,467	7,313	7,462	7,354	6,336	6,315
Inventory turnover		155.85	148.55	156.41	167.21	169.27	164.34	160.90	165.14	172.74	207.25	234.22	255.00	242.20	227.83	227.23	226.65	218.60	214.53	243.87	240.97

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,870,822K ÷ $12,004K
= 155.85

Chemed Corp.'s inventory turnover ratio has been relatively stable and high over the past eight quarters, ranging from a low of 116.44 to a high of 133.36. This indicates that the company efficiently manages its inventory levels, with a high rate of inventory turnover.

The Q1 2023 inventory turnover ratio of 131.67 is slightly lower compared to the previous quarter but remains at a strong level. This may suggest minor fluctuations in inventory management efficiency within Chemed Corp.

Overall, the consistently high inventory turnover ratios reflect Chemed Corp.'s effective inventory control, indicating that the company is efficiently managing its inventory levels and turning over its inventory multiple times throughout the year. This high turnover rate can help prevent inventory obsolescence and reduce associated carrying costs, ultimately contributing to improved cash flow and profitability for the company.