Insulet Corporation (PODD)

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	448,200	430,200	574,100	551,400	537,200	541,000	554,100	531,600	499,700	441,800	376,200	347,600	346,700	337,200	332,500	335,800	322,100	312,400	299,235	276,153
Inventory	US$ in thousands	430,400	444,900	430,900	430,600	402,600	410,800	411,300	386,100	346,800	327,600	320,400	314,800	303,200	259,000	197,800	170,100	154,300	124,900	103,700	95,700
Inventory turnover		1.04	0.97	1.33	1.28	1.33	1.32	1.35	1.38	1.44	1.35	1.17	1.10	1.14	1.30	1.68	1.97	2.09	2.50	2.89	2.89

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $448,200K ÷ $430,400K
= 1.04

Insulet Corporation's inventory turnover has shown a declining trend over the period from March 31, 2020, to December 31, 2024. The inventory turnover ratio measures how efficiently a company is managing its inventory by indicating the number of times inventory is sold and replaced over a specific period.

In March 2020, the inventory turnover was 2.89, which means the company sold and replaced its inventory nearly three times during that period. However, this ratio gradually decreased to 0.97 by December 2024, indicating a slowdown in inventory turnover efficiency.

A decreasing inventory turnover ratio may suggest inefficiencies in managing inventory levels, purchasing excess inventory, slow-moving goods, or challenges in sales and demand forecasting. It could also indicate potential cash flow issues if excess inventory is tying up working capital.

Insulet Corporation should closely monitor its inventory management practices, optimize inventory levels, and improve demand forecasting to enhance operational efficiency and financial performance. Regularly reviewing and adjusting inventory control strategies can help improve inventory turnover and overall profitability.