Jazz Pharmaceuticals PLC (JAZZ)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,951,870	2,150,260	1,977,780	1,249,950	1,091,760
Inventory	US$ in thousands	597,039	714,061	1,072,720	95,396	78,608
Inventory turnover		3.27	3.01	1.84	13.10	13.89

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,951,870K ÷ $597,039K
= 3.27

Inventory turnover is a key financial ratio that indicates how efficiently a company manages its inventory levels. Jazz Pharmaceuticals plc's inventory turnover has fluctuated over the past five years. In 2023, the inventory turnover ratio was 0.73, slightly lower than the previous year's ratio of 0.76. This suggests that in 2023, the company turned over its inventory approximately 0.73 times during the year, implying that the company took longer to sell its inventory compared to the previous year.

Comparing the 2023 and 2022 ratios to those of 2021, it is evident that the company's inventory turnover has generally been on a decreasing trend. The lowest inventory turnover ratio was recorded in 2021 at 0.41, indicating that the company was inefficient in managing its inventory that year. However, there was a significant improvement in 2022 and 2023, although the ratio remained below the levels seen in 2020 and 2019.

Overall, the declining trend in inventory turnover may suggest potential issues with inventory management efficiency at Jazz Pharmaceuticals plc. Further analysis and comparison with industry benchmarks would provide more insight into the company's performance in this aspect.