West Pharmaceutical Services Inc (WST)
Inventory turnover
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 2,096,500 | 2,006,000 | 1,989,200 | 1,968,800 | 1,958,900 | 2,037,200 | 2,012,600 | 1,982,000 | 1,945,400 | 1,856,800 | 1,781,800 | 1,693,600 | 1,619,300 | 1,490,200 | 1,363,300 | 1,262,000 | 1,234,200 | 1,206,100 | 1,193,900 | 1,187,400 |
| Inventory | US$ in thousands | 434,700 | 431,800 | 449,400 | 447,000 | 414,800 | 413,100 | 411,600 | 416,500 | 378,400 | 353,800 | 345,200 | 310,200 | 321,300 | 294,900 | 274,800 | 251,000 | 235,700 | 230,400 | 232,300 | 226,100 |
| Inventory turnover | 4.82 | 4.65 | 4.43 | 4.40 | 4.72 | 4.93 | 4.89 | 4.76 | 5.14 | 5.25 | 5.16 | 5.46 | 5.04 | 5.05 | 4.96 | 5.03 | 5.24 | 5.23 | 5.14 | 5.25 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,096,500K ÷ $434,700K
= 4.82
The inventory turnover ratio for West Pharmaceutical Services, Inc. over the past eight quarters has ranged from 3.94 to 4.22. This ratio indicates how efficiently the company is managing its inventory by measuring the number of times the company sells and replaces its inventory during a specific period. A higher inventory turnover ratio is generally preferred as it suggests that the company is selling its products quickly and effectively.
The consistency in West Pharmaceutical Services, Inc.'s inventory turnover ratio over the quarters suggests that the company has been able to maintain a relatively stable pace of inventory management. It is important to note that a stable inventory turnover ratio signifies operational efficiency and effective inventory management practices.
The quarterly fluctuations in the ratio, albeit minor, could be a result of seasonality in demand for the company's products or variations in production or sales volumes. However, the overall trend indicates that West Pharmaceutical Services, Inc. has been able to effectively control its inventory levels and capitalize on selling its products in a timely manner.
Overall, the inventory turnover ratio for West Pharmaceutical Services, Inc. demonstrates a consistent and efficient management of inventory, highlighting the company's ability to balance stock levels with customer demand effectively.
Peer comparison
Dec 31, 2023
Dec 31, 2023