West Pharmaceutical Services Inc (WST)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,894,700 | 1,820,600 | 1,750,700 | 1,655,800 | 1,379,100 |
| Inventory | US$ in thousands | 377,000 | 434,700 | 414,800 | 378,400 | 321,300 |
| Inventory turnover | 5.03 | 4.19 | 4.22 | 4.38 | 4.29 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,894,700K ÷ $377,000K
= 5.03
West Pharmaceutical Services Inc's inventory turnover has been relatively stable over the past five years, ranging from 4.19 to 5.03 times. The inventory turnover ratio measures how efficiently the company manages its inventory by showing how many times it sells and replaces its inventory during a specific period.
A higher inventory turnover indicates that the company is selling through its inventory more quickly, which can be a positive sign of efficient inventory management. In this case, the increasing trend in the inventory turnover ratio from 2020 to 2024 suggests that West Pharmaceutical Services Inc has been improving its inventory management efficiency over the years.
However, it is essential to consider industry benchmarks and company-specific factors when evaluating inventory turnover. While West Pharmaceutical Services Inc's inventory turnover has been showing improvement, further analysis is recommended to understand the underlying reasons for these changes and assess the overall effectiveness of the company's inventory management strategies.
Peer comparison
Dec 31, 2024