Organon & Co (OGN)

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
Cost of revenue (ttm)	US$ in thousands	2,688,000	2,675,000	2,628,000	2,600,000	2,515,000	2,426,000	2,365,000	2,313,000	2,294,000	2,299,000	2,357,000	2,352,000	2,382,000	3,597,000	3,523,000	3,400,000	3,347,000
Inventory	US$ in thousands	1,321,000	1,383,000	1,287,000	1,263,000	1,315,000	1,186,000	1,199,000	1,121,000	1,003,000	879,000	950,000	946,000	915,000	918,000	871,000	924,000	913,000
Inventory turnover		2.03	1.93	2.04	2.06	1.91	2.05	1.97	2.06	2.29	2.62	2.48	2.49	2.60	3.92	4.04	3.68	3.67

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,688,000K ÷ $1,321,000K
= 2.03

The inventory turnover ratio of Organon & Co has fluctuated over the years based on the provided data. The ratio indicates how efficiently the company is managing its inventory by measuring how many times the inventory is sold and replaced within a specific period.

From December 31, 2020, to June 30, 2021, the inventory turnover ratio showed an increasing trend from 3.67 to 4.04, suggesting that the company was selling its inventory at a faster rate during this period. However, from December 31, 2021, to June 30, 2024, the ratio experienced a declining trend, dropping from 2.60 to 1.93, before slightly improving to 2.03 by December 31, 2024.

A lower inventory turnover ratio may indicate overstocking, obsolete inventory, or potential sales issues, which could lead to higher holding costs and reduced profitability. It is essential for Organon & Co to monitor and optimize its inventory management strategies to improve the efficiency of inventory turnover and enhance overall financial performance.