CVS Health Corp (CVS)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 394,406,000 | 345,066,000 | 308,255,000 | 278,888,000 | 267,544,000 |
| Inventory | US$ in thousands | 18,025,000 | 19,090,000 | 17,760,000 | 18,496,000 | 17,516,000 |
| Inventory turnover | 21.88 | 18.08 | 17.36 | 15.08 | 15.27 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $394,406,000K ÷ $18,025,000K
= 21.88
Inventory turnover measures how efficiently CVS Health Corp is managing its inventory by indicating how many times the company sells and replaces its inventory within a specific period. A higher inventory turnover ratio indicates that the company is selling products quickly and efficiently.
From the data provided, we observe a general increasing trend in inventory turnover over the past five years, with values of 12.04 in 2023, 10.31 in 2022, 9.90 in 2021, 8.87 in 2020, and 9.06 in 2019. This suggests that CVS has been more efficient in managing its inventory over the years, with a notable improvement in inventory turnover ratio.
The higher inventory turnover ratio in recent years can indicate effective inventory management strategies, such as optimizing inventory levels, reducing excess inventory, and improving demand forecasting. This trend signals improved efficiency in CVS Health Corp's operations, leading to a faster turnover of inventory, which can positively impact profitability and cash flow.
Overall, the increasing trend in inventory turnover ratios reflects CVS's ability to sell its products quickly and efficiently, optimizing its inventory management practices over the years.
Peer comparison
Dec 31, 2023