Merck & Company Inc (MRK)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	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
Cost of revenue (ttm)	US$ in thousands	28,126,000	28,717,000	28,778,000	29,139,000	29,510,000	29,379,000	29,096,000	29,173,000	30,451,000	29,693,000	29,138,000	27,652,000	26,529,000	30,232,000	30,256,000	30,439,000	29,776,000	26,138,000	27,476,000	28,046,000
Inventory	US$ in thousands	6,109,000	6,244,000	6,469,000	6,510,000	6,358,000	6,131,000	5,930,000	5,863,000	5,911,000	5,614,000	5,535,000	5,774,000	5,953,000	5,603,000	5,499,000	6,402,000	5,554,000	6,128,000	6,056,000	5,846,000
Inventory turnover		4.60	4.60	4.45	4.48	4.64	4.79	4.91	4.98	5.15	5.29	5.26	4.79	4.46	5.40	5.50	4.75	5.36	4.27	4.54	4.80

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $28,126,000K ÷ $6,109,000K
= 4.60

Inventory turnover is a crucial financial ratio that measures how efficiently a company manages its inventory. It indicates how many times during a specific period (often a year) a company sells and replaces its inventory. A higher inventory turnover generally signifies that a company is effectively managing its inventory levels, minimizing holding costs, and turning its inventory into sales quickly.

Analyzing the inventory turnover data of Merck & Company Inc from March 31, 2020, to December 31, 2024, reveals fluctuations in the ratio over time. The inventory turnover ranged from a low of 4.27 in September 30, 2020, to a high of 5.50 in June 30, 2021. The average inventory turnover for this period was approximately 4.93.

The trend in the inventory turnover ratio indicates that Merck & Company Inc has generally maintained a relatively stable and efficient inventory turnover rate. However, there are some fluctuations from period to period, suggesting potential variations in demand, production efficiency, or inventory management practices.

Overall, a consistent inventory turnover ratio can indicate effective inventory management, while significant fluctuations may warrant a closer look into the company's operational efficiency and inventory control processes. It is important for investors and stakeholders to monitor changes in inventory turnover to assess how well the company is utilizing its resources and managing its inventory effectively.