Johnson & Johnson (JNJ)
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 | 43,925,000 | 42,913,000 | 41,861,000 | 40,969,000 | 55,985,000 | 59,175,000 | 61,373,000 | 60,959,000 | 59,405,000 | 58,754,000 | 58,015,000 | 55,832,000 | 55,504,000 | 40,179,000 | 39,918,000 | 40,828,000 | 41,277,000 | 41,163,000 | 39,973,000 | 26,506,000 |
| Inventory | US$ in thousands | 11,181,000 | 11,198,000 | 12,888,000 | 12,809,000 | 10,268,000 | 11,675,000 | 11,437,000 | 10,990,000 | 10,387,000 | 10,387,000 | 10,100,000 | 9,952,000 | 9,344,000 | 9,599,000 | 9,424,000 | 8,868,000 | 9,020,000 | 9,173,000 | 9,263,000 | 9,086,000 |
| Inventory turnover | 3.93 | 3.83 | 3.25 | 3.20 | 5.45 | 5.07 | 5.37 | 5.55 | 5.72 | 5.66 | 5.74 | 5.61 | 5.94 | 4.19 | 4.24 | 4.60 | 4.58 | 4.49 | 4.32 | 2.92 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $43,925,000K ÷ $11,181,000K
= 3.93
Johnson & Johnson's inventory turnover ratio has shown fluctuations over the past eight quarters. The ratio ranged from 2.37 to 2.77 during this period. A decreasing trend can be observed from Q3 2022 to Q2 2023, followed by a slight increase in Q3 2023. The company's inventory turnover ratio of around 2.5 to 2.7 indicates that it takes approximately 2.5 to 2.7 times to sell and replace its inventory over a given period.
A lower inventory turnover may suggest that the company is carrying too much inventory relative to its sales level, which could tie up capital and increase storage costs. On the other hand, a very high inventory turnover could indicate inventory shortages, potentially leading to lost sales.
Although the fluctuations in the inventory turnover ratio should be further analyzed in conjunction with other financial metrics and industry benchmarks, Johnson & Johnson should aim to strike a balance in managing its inventory levels efficiently to optimize working capital and profitability.
Peer comparison
Dec 31, 2023
Dec 31, 2023