Merit Medical Systems Inc (MMSI)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,103,830	1,025,110	986,060	962,781	980,910
Inventory	US$ in thousands	303,871	265,991	221,922	198,019	225,698
Inventory turnover		3.63	3.85	4.44	4.86	4.35

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,103,830K ÷ $303,871K
= 3.63

The inventory turnover for Merit Medical Systems, Inc. has experienced fluctuations over the past five years. The inventory turnover ratio measures how efficiently the company is managing its inventory by indicating the number of times it sells and replaces its inventory in a given period.

In 2023, the inventory turnover ratio decreased to 2.22 from 2.38 in 2022, signaling a slight decline in the company's efficiency in selling and replenishing its inventory. This could potentially indicate slower sales relative to the amount of inventory held.

Comparing to the previous years, the inventory turnover ratio was highest in 2020 at 2.84, indicating that the company was more efficient in managing its inventory that year. In 2021 and 2019, the ratios were 2.66 and 2.49, respectively, showing relatively consistent performance in inventory turnover.

It would be advisable for Merit Medical Systems, Inc. to further investigate the reasons behind the recent decline in inventory turnover and take appropriate actions to optimize its inventory management processes. This could involve implementing better forecasting methods, streamlining supply chain operations, or revising inventory levels to align with sales demands and market conditions.