McKesson Corporation (MCK)

Inventory turnover

		Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	305,530,000	298,462,000	287,451,000	280,222,000	272,946,000	271,934,000	271,016,000	267,926,000	263,887,000	261,588,000	260,977,000	253,011,000	244,110,000	243,662,000	232,306,000	229,178,000	229,027,000	212,990,000	210,038,000	205,597,000
Inventory	US$ in thousands	21,100,000	22,020,000	21,945,000	20,510,000	19,691,000	20,657,000	19,876,000	19,505,000	18,702,000	19,024,000	19,342,000	20,016,000	19,246,000	19,211,000	18,435,000	16,607,000	16,734,000	17,020,000	16,356,000	16,604,000
Inventory turnover		14.48	13.55	13.10	13.66	13.86	13.16	13.64	13.74	14.11	13.75	13.49	12.64	12.68	12.68	12.60	13.80	13.69	12.51	12.84	12.38

March 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $305,530,000K ÷ $21,100,000K
= 14.48

The inventory turnover ratio for McKesson Corporation has shown a relatively stable and consistent trend over the past several quarters. The ratio has ranged from 12.38 to 14.48, indicating that on average, inventory is turned over approximately 13 times a year. This suggests that McKesson efficiently manages its inventory levels, converting its inventory into sales or revenue effectively.

The highest inventory turnover ratio of 14.48 was observed in March 2024, while the lowest ratio of 12.38 was recorded in September 2019. Overall, the company's inventory turnover has generally remained above 12, indicating a healthy rate of inventory turnover.

A higher inventory turnover ratio typically signifies that the company is effectively managing its inventory levels, which can lead to lower carrying costs and reduced risk of obsolete inventory. However, it is crucial to consider industry norms and company-specific factors when evaluating inventory turnover ratios.