Merck & Company Inc (MRK)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	28,124,000	29,523,000	31,360,000	25,611,000	29,810,000
Inventory	US$ in thousands	6,109,000	6,358,000	5,911,000	5,953,000	5,554,000
Inventory turnover		4.60	4.64	5.31	4.30	5.37

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $28,124,000K ÷ $6,109,000K
= 4.60

Based on the provided data, the inventory turnover of Merck & Company Inc has shown fluctuation over the years. In December 31, 2020, the inventory turnover was 5.37 times, indicating that on average, the company sold and replaced its inventory 5.37 times during that year.

However, in the subsequent years, there was a decrease in the inventory turnover ratio. By December 31, 2021, the turnover had decreased to 4.30 times, suggesting a slower rate of inventory turnover compared to the previous year.

In December 31, 2022, there was a slight recovery in the inventory turnover to 5.31 times, indicating that the company improved its inventory management compared to the prior year.

Nonetheless, by December 31, 2023, the turnover ratio decreased again to 4.64 times, which suggests that the company may have faced challenges in efficiently managing its inventory during that period.

By the end of December 31, 2024, the inventory turnover remained relatively stable at 4.60 times, indicating a consistent turnover rate compared to the preceding year.

Overall, the fluctuation in Merck & Company Inc's inventory turnover ratio over the years may indicate changes in sales patterns, inventory management practices, or industry dynamics that have influenced the company's operational efficiency in managing its inventory levels. Monitoring and analyzing these fluctuations can provide insights into the company's financial health and operational performance.