Embecta Corp (EMBC)

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
Cost of revenue (ttm)	US$ in thousands	747,800	724,300	355,100	342,900	320,900	246,200
Inventory	US$ in thousands	149,200	152,100	170,300	157,600	143,400	122,800	130,300	122,400	119,100
Inventory turnover		5.01	4.76	2.09	2.18	2.24	2.00

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $747,800K ÷ $149,200K
= 5.01

Embecta Corp's inventory turnover has shown fluctuations over the past few quarters. The inventory turnover ratio indicates how many times a company's inventory is sold and replaced over a certain period. A higher inventory turnover ratio suggests that the company is selling its inventory quickly and efficiently.

In the most recent quarter, the inventory turnover ratio stood at 5.01, which indicates that Embecta Corp sold and replaced its inventory approximately 5 times during that period. This represents a significant improvement from the previous quarter when the ratio was 4.76. The increase in inventory turnover may be a positive sign of effective inventory management, allowing the company to convert its inventory into sales more rapidly.

However, in the preceding quarters, the inventory turnover ratios were lower, ranging from 2.00 to 2.24, suggesting a slower rate of inventory turnover during those periods. This could indicate potential inefficiencies in managing inventory levels, which may tie up capital and lead to carrying costs.

Overall, the recent improvement in inventory turnover for Embecta Corp is a positive signal, but it would be beneficial for the company to continuously monitor and optimize its inventory management practices to ensure efficient use of resources and maximize profitability.