Vertex Pharmaceuticals Inc (VRTX)

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	3,045,900	2,975,300	2,793,400	2,620,500	2,443,200	2,263,400	2,217,100	2,123,000	2,076,000	2,028,752	1,927,253	1,872,794	1,796,200	1,656,692	1,592,724	1,546,407	1,506,756	1,472,101	1,405,173	1,321,091
Inventory	US$ in thousands	1,205,400	1,079,800	914,600	813,100	738,800	688,700	603,500	535,100	460,600	388,200	367,700	338,900	353,100	333,456	321,620	298,863	280,800	245,460	219,218	187,087
Inventory turnover		2.53	2.76	3.05	3.22	3.31	3.29	3.67	3.97	4.51	5.23	5.24	5.53	5.09	4.97	4.95	5.17	5.37	6.00	6.41	7.06

December 31, 2024 calculation

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

The inventory turnover ratio for Vertex Pharmaceuticals Inc has been showing a declining trend over the period from March 31, 2020, to December 31, 2024. The ratio decreased from 7.06 on March 31, 2020, to 2.53 on December 31, 2024.

A higher inventory turnover ratio indicates that the company is selling its inventory more efficiently, while a lower ratio may suggest that the company is holding onto excess inventory or facing challenges in selling its products.

The declining trend in the inventory turnover ratio for Vertex Pharmaceuticals Inc could be a cause for concern, as it may indicate inefficiencies in managing inventory levels or challenges in selling products. The company may need to evaluate its inventory management practices, such as optimizing procurement processes, improving demand forecasting, or managing production levels more effectively, to improve its inventory turnover ratio and overall operational efficiency.