Tandem Diabetes Care Inc (TNDM)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	746,331	736,212	599,792	452,413	339,528
Inventory	US$ in thousands	157,937	111,117	68,551	63,721	49,073
Inventory turnover		4.73	6.63	8.75	7.10	6.92

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $746,331K ÷ $157,937K
= 4.73

Tandem Diabetes Care Inc's inventory turnover has fluctuated over the past five years. The trend indicates a general decrease in inventory turnover from 4.76 in 2021 to 2.41 in 2023. This suggests that, on average, the company has been selling its inventory at a slower pace in recent years.

A lower inventory turnover may imply that Tandem Diabetes Care Inc is holding onto its inventory for a longer period before selling it. This could be due to various reasons such as overstocking, poor demand forecasting, or inefficient inventory management.

It is important for the company to closely monitor its inventory turnover ratio to ensure that it maintains an optimal level of inventory that aligns with its sales volume. A declining inventory turnover ratio could potentially tie up cash flow in excess inventory, increase storage costs, and lead to obsolescence risk.

Further analysis and review of the company's inventory management practices, supply chain efficiency, and demand forecasting may be necessary to address the declining trend in inventory turnover and optimize working capital management.