Charles River Laboratories (CRL)

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	2,750,437	2,984,151	2,286,691	1,628,258	1,595,671	1,581,101	1,575,953	1,512,600	827,224	762,697	726,949	763,190	759,311	757,433	731,898	689,736	662,854	648,178	646,148	642,342
Inventory	US$ in thousands	278,544	336,200	349,111	361,281	380,259	292,972	285,280	262,584	255,809	261,522	256,765	221,175	199,146	181,694	194,341	193,584	185,695	181,367	168,366	162,938
Inventory turnover		9.87	8.88	6.55	4.51	4.20	5.40	5.52	5.76	3.23	2.92	2.83	3.45	3.81	4.17	3.77	3.56	3.57	3.57	3.84	3.94

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,750,437K ÷ $278,544K
= 9.87

Inventory turnover is an important financial ratio that measures how efficiently a company is managing its inventory by indicating how many times during a specific period the inventory is sold and replaced. For Charles River Laboratories, the inventory turnover ratio has fluctuated over the given periods.

From March 31, 2020, to June 30, 2021, the trend was relatively stable, with ratios ranging from 3.56 to 3.77. This range indicates that the company was turning over its inventory approximately 3 to 4 times a year during this period. However, from June 30, 2021, to June 30, 2022, there was a notable decline in the inventory turnover ratio, reaching as low as 2.83. This could suggest inefficiencies in inventory management or a slowdown in sales relative to inventory levels.

The ratio started to improve from March 31, 2023, showing a significant increase in the following periods, reaching a peak of 9.87 as of December 31, 2024. A higher inventory turnover ratio generally indicates that the company is selling its products more quickly and efficiently, which can lead to better cash flow and profitability.

It is important for Charles River Laboratories to closely monitor its inventory turnover ratio to ensure optimal inventory management. A consistently high ratio may indicate either strong sales performance or optimized inventory levels, while a low ratio could suggest overstocking or challenges in selling products efficiently. Regular analysis of this ratio can help the company make informed decisions about inventory control and sales strategies.