Quest Diagnostics Incorporated (DGX)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 6,199,000 | 6,450,000 | 6,579,000 | 5,804,000 | 5,037,000 |
| Inventory | US$ in thousands | 190,000 | 192,000 | 208,000 | 223,000 | 123,000 |
| Inventory turnover | 32.63 | 33.59 | 31.63 | 26.03 | 40.95 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $6,199,000K ÷ $190,000K
= 32.63
Quest Diagnostics, Inc.'s inventory turnover has shown fluctuations over the past five years. The inventory turnover ratio measures how many times a company sells and replaces its inventory during a specific period. A higher inventory turnover ratio is generally favorable as it indicates efficient management of inventory levels.
In 2023, the inventory turnover ratio decreased to 32.63 from 33.59 in 2022, suggesting a slight decline in the efficiency of inventory management. Despite this decrease, the ratio remains relatively high, indicating that Quest Diagnostics is able to sell and replace its inventory more frequently compared to the industry average.
Looking further back, the company's inventory turnover ratio was 31.63 in 2021, 26.03 in 2020, and 40.95 in 2019. The significant increase in 2019 followed by a decline in 2020 might be attributed to changes in demand, production levels, or inventory management strategies.
Overall, Quest Diagnostics, Inc. has generally maintained a relatively high inventory turnover ratio over the past five years, signifying effective inventory management practices. It is important for the company to continue monitoring and optimizing its inventory levels to ensure operational efficiency and profitability.
Peer comparison
Dec 31, 2023