Viatris Inc (VTRS)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	8,988,300	9,765,700	12,310,800	8,149,300	7,602,900
Inventory	US$ in thousands	3,469,700	3,519,500	3,977,700	5,471,900	2,670,900
Inventory turnover		2.59	2.77	3.09	1.49	2.85

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $8,988,300K ÷ $3,469,700K
= 2.59

Viatris Inc's inventory turnover has shown fluctuating trends over the past five years. The ratio decreased from 3.09 in 2021 to 2.59 in 2023, indicating that the company took longer to sell its inventory compared to the previous year. However, the inventory turnover ratio in 2023 is still higher than the ratio in 2020, suggesting some improvement in managing inventory levels.

A lower inventory turnover ratio could potentially signal issues such as overstocking or slow-moving inventory. It may also indicate a decrease in sales relative to the amount of inventory held by the company. On the other hand, a higher ratio implies that the company is selling its inventory more quickly, which can be a positive sign of efficient inventory management.

Further analysis of the reasons behind the fluctuations in inventory turnover would provide better insights into Viatris Inc's inventory management practices and overall business performance. It is essential for the company to balance inventory levels effectively to optimize working capital and ensure smooth operations.