Agilent Technologies Inc (A)
Inventory turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 5,484,000 | 4,987,000 | 4,776,000 | 4,332,000 | 3,994,000 |
| Inventory | US$ in thousands | 1,031,000 | 1,038,000 | 830,000 | 720,000 | 679,000 |
| Inventory turnover | 5.32 | 4.80 | 5.75 | 6.02 | 5.88 |
October 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $5,484,000K ÷ $1,031,000K
= 5.32
The inventory turnover ratio measures a company's efficiency in managing its inventory by indicating how many times the company's inventory is sold and replaced over a given period. For Agilent Technologies Inc., the inventory turnover ratios for the past five years are as follows:
- Oct 31, 2023: 3.27
- Oct 31, 2022: 3.01
- Oct 31, 2021: 3.51
- Oct 31, 2020: 3.48
- Oct 31, 2019: 3.47
Agilent's inventory turnover has fluctuated slightly over the years but generally indicates that the company efficiently manages its inventory. A higher inventory turnover ratio reflects a more efficient use of inventory and may suggest strong sales or effective inventory management.
The increasing inventory turnover from 2022 to 2023 (3.01 to 3.27) is a positive sign, signaling that Agilent is selling its inventory more frequently, potentially reducing holding costs and the risk of obsolescence. This could also indicate efficient demand forecasting and production planning, as well as effective inventory control and management.
However, it's important to consider industry norms and the nature of Agilent's business when interpreting inventory turnover ratios. A high turnover ratio may be appropriate for businesses with perishable goods or rapidly changing technological products, which could be the case for Agilent as a technology company.
Overall, Agilent's inventory turnover ratio suggests that the company is effectively managing its inventory, but it's important to consider this ratio alongside other performance indicators and industry benchmarks for a comprehensive assessment of the company's operational efficiency.
Peer comparison
Oct 31, 2023