Vertex Pharmaceuticals Inc (VRTX)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	3,045,900	2,443,200	2,076,000	1,796,200	1,557,980
Inventory	US$ in thousands	1,205,400	738,800	460,600	353,100	280,800
Inventory turnover		2.53	3.31	4.51	5.09	5.55

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $3,045,900K ÷ $1,205,400K
= 2.53

The inventory turnover ratio for Vertex Pharmaceuticals Inc has shown a decreasing trend over the past five years. In December 2020, the inventory turnover ratio was 5.55, indicating that the company's inventory was turned over approximately 5.55 times during the year. However, by December 2024, this ratio had decreased to 2.53, suggesting that the company's inventory turnover had declined significantly.

A decreasing inventory turnover ratio could indicate that Vertex Pharmaceuticals Inc is facing challenges in managing its inventory efficiently. This could potentially lead to higher carrying costs, obsolescence, or excess inventory levels.

It is important for the company to monitor and improve its inventory management practices to optimize inventory turnover and ensure that its resources are utilized effectively. Further analysis of the company's inventory trends and comparison with industry benchmarks can provide valuable insights into its operational efficiency and financial performance.