Globus Medical (GMED)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	1,035,480	548,174	263,725	239,223	217,463
Inventory	US$ in thousands	659,233	848,135	298,981	237,001	229,153
Inventory turnover		1.57	0.65	0.88	1.01	0.95

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,035,480K ÷ $659,233K
= 1.57

Globus Medical's inventory turnover has fluctuated over the past five years. In 2020, the inventory turnover was 0.95, indicating that the company sold its entire inventory almost once during that year. The ratio slightly improved in 2021 to 1.01, suggesting a more efficient management of inventory. However, in 2022, the inventory turnover decreased to 0.88, implying that the company took longer to sell its inventory compared to the previous year.

The trend continued in 2023 as the inventory turnover dropped to 0.65, signaling potential challenges in managing inventory levels or demand for the company's products. This decreased turnover rate may lead to higher carrying costs and the risk of obsolete inventory.

Nevertheless, Globus Medical significantly improved its inventory turnover in 2024, reaching 1.57. This suggests a more rapid turnover of inventory, which could result from better inventory management practices, increased sales efficiency, or a shift in product demand.

Overall, the fluctuation in Globus Medical's inventory turnover indicates the importance of closely monitoring and managing inventory levels to optimize operational efficiency and financial performance.