United Therapeutics Corporation (UTHR)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	733,100	387,200	325,100	302,200	167,400	509,000	425,700	320,800	396,100	330,900	290,100	301,500	275,600	172,200	193,700	142,700	117,600	120,700	139,600	174,600
Inventory	US$ in thousands	111,800	104,300	103,300	102,500	102,000	91,000	89,900	88,200	93,800	96,700	89,900	92,200	86,500	87,900	89,700	92,000	93,400	94,100	96,900	96,200
Inventory turnover		6.56	3.71	3.15	2.95	1.64	5.59	4.74	3.64	4.22	3.42	3.23	3.27	3.19	1.96	2.16	1.55	1.26	1.28	1.44	1.81

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $733,100K ÷ $111,800K
= 6.56

Inventory turnover measures how efficiently a company manages its inventory by showing how many times it sells and replaces its inventory during a specific period.

Looking at the inventory turnover data for United Therapeutics Corp over the past eight quarters, we can observe a fluctuating trend. The inventory turnover ratio has varied between 1.31 to 2.35.

A higher inventory turnover ratio indicates that the company is selling its products more quickly and efficiently. In the latest quarter, Q4 2023, the inventory turnover ratio was 2.30, which suggests an improvement in inventory management compared to the previous quarters. This increase could be due to factors such as effective inventory control, better demand forecasting, or streamlined production processes.

On the other hand, in Q1 2023, the inventory turnover ratio was at a relatively lower value of 1.74, indicating that the company took longer to sell and replace its inventory during that period. This might signal potential issues such as excess or obsolete inventory, slower sales, or inefficiencies in the supply chain.

Overall, it is essential for United Therapeutics Corp to monitor its inventory turnover consistently to ensure optimal inventory management. A sustainable increase in inventory turnover can lead to improved cash flow, profitability, and overall operational efficiency for the company.