LivaNova PLC (LIVN)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	939,397	931,642	945,014	827,792	1,006,240
Inventory	US$ in thousands	147,566	147,887	129,379	105,840	115,285
Inventory turnover		6.37	6.30	7.30	7.82	8.73

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $939,397K ÷ $147,566K
= 6.37

The inventory turnover ratio measures how effectively a company manages its inventory by showing how many times it sells and replaces its inventory in a given period.

For LivaNova PLC, the inventory turnover ratio has been declining over the years. In 2020, the ratio was 8.73, indicating that the company turned over its inventory approximately 8.73 times during that year. However, by the end of 2024, the ratio had decreased to 6.37, suggesting a decrease in inventory turnover efficiency.

A decreasing inventory turnover ratio could imply issues such as overstocking, slow-moving inventory, or declining sales. It may also indicate potential liquidity problems if excess inventory ties up cash that could be used elsewhere in the business.

LivaNova PLC may need to reassess its inventory management practices to optimize inventory levels, improve sales forecasting, and enhance operational efficiency to maintain a healthy balance between inventory turnover and profitability.