Chemed(Che) Financials: Inventory Turnover Compared To Industry Average, Plus Other Key Ratios
Growth Trend (Last 5 Years)
Growth - inventory turnover
This chart shows the historical trend of inventory turnover for CHE compared to its industry average over the recent years.
Ratio Definition and Interpretation
Name: Inventory Turnover
Definition: Inventory turnover measures how quickly the company sells and replaces its inventory. A higher turnover means products are selling fast and inventory isn’t sitting idle. Slow turnover may suggest weak sales, poor demand forecasting, or obsolete inventory piling up — all of which can tie up cash unnecessarily.
Interpretation:
• In '2021', CHE's inventory turnover was 135.47, reflecting efficiency in managing inventory stock. Industry average for Medical/Nursing Services in '2021' stood at 4.89.
• In '2022', CHE's inventory turnover was 134.43, reflecting efficiency in managing inventory stock. The decline from '2021' may indicate some operational or financial challenges. Industry average for Medical/Nursing Services in '2022' stood at 5.98. Industry average increased by 1.09 compared to previous year.
• In '2023', CHE's inventory turnover was 131.59, reflecting efficiency in managing inventory stock. The decline from '2022' may indicate some operational or financial challenges. Industry average for Medical/Nursing Services in '2023' stood at 7.16. Industry average increased by 1.18 compared to previous year.
• In '2024', CHE's inventory turnover was 156.16, reflecting efficiency in managing inventory stock. The increase since '2023' reflects strengthening financial performance. Industry average for Medical/Nursing Services in '2024' stood at 8.10. Industry average increased by 0.94 compared to previous year.
Overall, CHE's inventory turnover has steadily improved over the past 4 years.
Formula: Inventory Turnover = Cost of Goods Sold / Average Inventory
Good Range: Typically 4 to 12 depending on industry.