CVS Health Corp (CVS)
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 | 394,775,000 | 358,275,000 | 356,282,000 | 351,364,000 | 345,066,000 | 325,651,000 | 318,365,000 | 312,751,000 | 308,255,000 | 287,099,000 | 282,660,000 | 279,408,000 | 278,888,000 | 272,152,000 | 271,732,000 | 270,520,000 | 267,535,000 | 176,447,000 | 175,445,000 | 175,488,000 |
| Inventory | US$ in thousands | 18,025,000 | 17,954,000 | 17,291,000 | 18,263,000 | 19,090,000 | 18,058,000 | 17,375,000 | 18,160,000 | 17,760,000 | 17,399,000 | 16,979,000 | 17,618,000 | 18,496,000 | 17,478,000 | 16,519,000 | 16,976,000 | 17,516,000 | 16,028,000 | 15,511,000 | 15,448,000 |
| Inventory turnover | 21.90 | 19.96 | 20.61 | 19.24 | 18.08 | 18.03 | 18.32 | 17.22 | 17.36 | 16.50 | 16.65 | 15.86 | 15.08 | 15.57 | 16.45 | 15.94 | 15.27 | 11.01 | 11.31 | 11.36 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $394,775,000K ÷ $18,025,000K
= 21.90
Inventory turnover measures how efficiently a company is managing its inventory by showing how many times the inventory is sold and replaced within a specific period. A higher inventory turnover ratio indicates that the company is selling its inventory quickly, which can lead to lower holding costs and potential obsolescence risks.
Based on the data provided for CVS Health Corp, we observe a consistent improvement in inventory turnover over the past eight quarters. The inventory turnover ratio has been steadily increasing from 9.93 in Q1 2022 to 12.04 in Q4 2023. This upward trend indicates that CVS Health Corp has been more effective in managing its inventory levels and turning over its inventory efficiently.
The company's inventory turnover ratios have consistently been above 10, indicating that CVS Health Corp has been able to sell and replace its inventory more than 10 times within the given time frame for each quarter. This suggests that CVS Health Corp is effectively managing its supply chain and inventory levels to meet customer demand and minimize excess inventory holding costs.
Overall, the increasing trend in the inventory turnover ratio for CVS Health Corp reflects positively on the company's inventory management practices and operational efficiency in converting inventory into sales. This can contribute to improved profitability and cash flow for the company.
Peer comparison
Dec 31, 2023
Dec 31, 2023