Innoviva Inc (INVA)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	120,016	69,138	16,187	13,883	14,656
Inventory	US$ in thousands	40,737	55,897	0	-93,931	-79,427
Inventory turnover		2.95	1.24	—	—	—

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $120,016K ÷ $40,737K
= 2.95

Based on the inventory turnover data provided for Innoviva Inc, we observe a fluctuating trend over the past five years. In 2019, the inventory turnover ratio was not available. However, in 2020, the ratio was notably low at 0.25, indicating that the company took approximately 4.00 years to sell and replace its inventory during that period.

Subsequently, there was a significant improvement in inventory management as seen in 2023 with the inventory turnover ratio increasing to 1.05. This suggests that Innoviva Inc was able to sell and restock its inventory more efficiently, taking approximately 0.95 years to cycle through its inventory.

The sharp increase in the inventory turnover ratio from 2022 to 2023 implies enhanced liquidity and potentially better working capital management. It is important for the company to maintain or further improve this ratio in subsequent years to ensure optimal utilization of resources and minimize carrying costs associated with excess inventory.