Option Care Health Inc (OPCH)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,985,210 | 3,321,100 | 3,077,820 | 2,659,030 | 2,350,350 |
| Inventory | US$ in thousands | 388,131 | 274,004 | 224,281 | 183,095 | 158,601 |
| Inventory turnover | 10.27 | 12.12 | 13.72 | 14.52 | 14.82 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,985,210K ÷ $388,131K
= 10.27
Option Care Health Inc's inventory turnover has been steadily decreasing over the past five years. The company's inventory turnover ratio was 14.82 in December 31, 2020, and has since declined to 10.27 by December 31, 2024.
A high inventory turnover ratio generally indicates that the company is efficiently managing its inventory levels and is able to quickly sell and replace its inventory. However, the decreasing trend in inventory turnover for Option Care Health Inc may suggest potential issues such as overstocking, slow-moving inventory, or ineffective inventory management.
A lower inventory turnover ratio implies that the company is taking longer to sell its inventory or is carrying excess inventory, which can tie up working capital and lead to higher storage costs. This could potentially impact the company's profitability and liquidity if not addressed.
Management should closely monitor and analyze the reasons behind the decreasing inventory turnover ratio to identify opportunities for improvement in inventory management processes and optimize the company's working capital efficiency.
Peer comparison
Dec 31, 2024