IDEXX Laboratories Inc (IDXX)

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	1,470,983	1,439,190	1,406,680	1,382,414	1,362,986	1,364,014	1,366,479	1,356,799	1,325,928	1,292,695	1,254,378	1,175,794	1,135,615	1,098,476	1,059,646	1,063,646	1,041,359	1,016,087	995,539	981,602
Inventory	US$ in thousands	380,282	393,974	395,141	391,011	367,823	354,975	332,565	301,638	269,030	258,484	241,392	225,559	209,873	217,597	229,377	211,644	195,019	204,893	196,876	189,468
Inventory turnover		3.87	3.65	3.56	3.54	3.71	3.84	4.11	4.50	4.93	5.00	5.20	5.21	5.41	5.05	4.62	5.03	5.34	4.96	5.06	5.18

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,470,983K ÷ $380,282K
= 3.87

Inventory turnover is a crucial financial ratio that provides insights into how efficiently a company manages its inventory. It is calculated by dividing the cost of goods sold by the average inventory balance. In the case of Idexx Laboratories, Inc., we observe fluctuations in its inventory turnover ratio across the quarters of 2022 and 2023.

The inventory turnover ratios for Idexx Laboratories, Inc. over the past eight quarters show a general declining trend from Q1 2022 to Q3 2023. The ratios range from a high of 4.50 in Q1 2022 to a low of 3.54 in Q1 2023. This downward trend indicates that the company's inventory is being turned over less frequently, which may suggest issues with inventory management or increased inventory levels relative to sales.

Although the recent ratios are slightly above or below the industry average, the downward trend should be monitored closely. A decreasing inventory turnover ratio typically implies excess inventory levels, potentially leading to increased holding costs, obsolescence risks, and decreased liquidity. Management may need to implement strategies to streamline inventory management processes, optimize stock levels, and improve demand forecasting to enhance efficiency and profitability.

Overall, the declining trend in Idexx Laboratories, Inc.'s inventory turnover ratios warrants further investigation and possibly corrective actions to ensure optimal utilization of resources and improved operational performance.