Merck & Company Inc (MRK)

Inventory turnover

		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	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	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	27,790,000	28,136,000	26,955,000	26,868,000
Inventory	US$ in thousands	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	5,978,000	5,855,000	5,847,000	5,712,000
Inventory turnover		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	4.65	4.81	4.61	4.70

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $29,510,000K ÷ $6,358,000K
= 4.64

The inventory turnover ratio for Merck & Co Inc has shown a declining trend from Q1 2022 to Q4 2023, indicating a decreasing efficiency in managing its inventory. The ratio decreased from 2.66 in Q1 2022 to 2.54 in Q4 2023. This suggests that the company is selling through its inventory at a slower rate, which may result in increased carrying costs and potential obsolescence.

While the ratio fluctuated slightly throughout the quarters, it is notable that the most recent ratio of 2.54 in Q4 2023 is the lowest in the provided data series. This could indicate potential challenges in inventory management or changes in demand for Merck & Co Inc's products.

Further analysis and investigation into the underlying reasons for the decreasing trend in inventory turnover would be beneficial to identify any operational inefficiencies or strategic shifts that may be impacting the company's ability to efficiently manage and sell its inventory.