Insulet Corporation (PODD)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	537,200	499,700	346,700	322,100	561,200
Inventory	US$ in thousands	402,600	346,800	303,200	154,300	101,000
Inventory turnover		1.33	1.44	1.14	2.09	5.56

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $537,200K ÷ $402,600K
= 1.33

Insulet Corporation's inventory turnover has shown variability over the past five years. The inventory turnover ratio indicates how efficiently the company manages its inventory by converting it into sales. A higher turnover ratio suggests efficient inventory management and lower carrying costs.

In 2020 and 2019, Insulet Corporation achieved relatively high inventory turnover ratios of 2.09 and 2.55, respectively, indicating strong sales relative to their inventory levels. This implies effective inventory management processes during those years.

However, in 2021, the inventory turnover ratio decreased significantly to 1.14, signaling a potential issue with inventory management efficiency or slower sales relative to the inventory levels. It is essential to investigate the factors contributing to this decline.

The company improved its inventory turnover slightly in 2022 to 1.44, but it remained below the levels seen in the previous years. This suggests ongoing efforts to enhance inventory management practices, but there may still be room for improvement.

In 2023, the inventory turnover ratio further decreased to 1.33. Although the ratio improved from the previous year, it remains lower than the levels seen in 2020 and 2019. It is crucial for Insulet Corporation to continue monitoring and optimizing their inventory management strategies to ensure efficient operations and maximize profitability.