CVS Health Corp (CVS)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 440,985,000 | 394,406,000 | 345,066,000 | 308,255,000 | 278,888,000 |
| Inventory | US$ in thousands | 18,107,000 | 18,025,000 | 19,090,000 | 17,760,000 | 18,496,000 |
| Inventory turnover | 24.35 | 21.88 | 18.08 | 17.36 | 15.08 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $440,985,000K ÷ $18,107,000K
= 24.35
To analyze CVS Health Corp's inventory turnover, we look at how efficiently the company is managing its inventory. The inventory turnover ratio indicates how many times a company sells and replaces its inventory during a period.
From the provided data, we observe a consistent improvement in CVS Health Corp's inventory turnover over the years. The ratio has increased from 15.08 in December 2020 to 24.35 in December 2024. This trend suggests that the company has been able to sell its inventory at a faster pace and effectively manage its stock levels.
A higher inventory turnover ratio typically indicates that the company is selling products quickly, which can lead to increased cash flow and reduced carrying costs. It also implies better inventory management and demand forecasting, enabling CVS Health Corp to optimize its working capital and potentially improve profitability.
Overall, the increasing trend in CVS Health Corp's inventory turnover ratio reflects positively on the company's operational efficiency and ability to effectively control its inventory levels to meet customer demand.
Peer comparison
Dec 31, 2024