Globus Medical (GMED)

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	548,174	353,279	283,386	275,383	263,725	254,930	247,987	243,363	239,223	238,286	236,829	223,626	217,463	205,364	193,654	187,001	179,975	177,169	169,631	163,278
Inventory	US$ in thousands	848,135	904,977	335,556	321,033	298,981	282,408	266,043	253,886	237,001	234,368	231,208	232,007	229,153	231,858	224,457	208,451	196,314	187,060	173,040	143,380
Inventory turnover		0.65	0.39	0.84	0.86	0.88	0.90	0.93	0.96	1.01	1.02	1.02	0.96	0.95	0.89	0.86	0.90	0.92	0.95	0.98	1.14

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $548,174K ÷ $848,135K
= 0.65

The inventory turnover ratio of Globus Medical Inc fluctuated over the past eight quarters. In Q4 2023, the ratio was 0.65, which indicates that the company's inventory turned over approximately 0.65 times during that quarter. This is lower than the previous quarter (Q3 2023) when the ratio was 0.39, suggesting a significant improvement in managing inventory levels.

However, compared to the same quarter of the previous year (Q4 2022), the inventory turnover has decreased from 0.88 to 0.65, indicating a potential inefficiency in managing inventory levels. It is worth noting that the inventory turnover ratio in Q2 and Q1 of 2023 improved to 0.84 and 0.86, respectively, before declining again in Q4 2023.

Overall, the trend in inventory turnover shows some fluctuations, with a general downward trend observed over the past year, which may be a cause for concern. Globus Medical Inc may need to review its inventory management strategies to ensure optimal inventory turnover and avoid excess inventory holding costs.