Vertex Pharmaceuticals Inc (VRTX)

Days of inventory on hand (DOH)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Inventory turnover		2.53	3.31	4.51	5.09	5.55
DOH	days	144.45	110.37	80.98	71.75	65.79

December 31, 2024 calculation

DOH = 365 ÷ Inventory turnover
= 365 ÷ 2.53
= 144.45

The days of inventory on hand (DOH) for Vertex Pharmaceuticals Inc have shown an upward trend over the past five years. The DOH increased from 65.79 days as of December 31, 2020, to 144.45 days as of December 31, 2024. This rise indicates that the company is holding onto its inventory for a longer period before selling it.

A higher DOH figure could suggest several possibilities, such as slower inventory turnover, potential overstocking, or difficulties in managing inventory levels effectively. It may also imply that the company is facing challenges in predicting demand accurately or that its products have longer shelf lives.

Vertex Pharmaceuticals Inc may need to reassess its inventory management strategies to optimize its working capital and avoid tying up excess resources in inventory. Monitoring and potentially reducing the DOH can lead to improved cash flows, increased efficiency, and better overall financial performance.