Analog Devices Inc (ADI)
Inventory turnover
| Oct 28, 2023 | Oct 29, 2022 | Oct 30, 2021 | Oct 31, 2020 | Nov 2, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 7,862,620 | 8,036,360 | 4,636,510 | 3,201,990 | 3,291,640 |
| Inventory | US$ in thousands | 1,642,210 | 1,399,910 | 1,200,610 | 608,260 | 609,886 |
| Inventory turnover | 4.79 | 5.74 | 3.86 | 5.26 | 5.40 |
October 28, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $7,862,620K ÷ $1,642,210K
= 4.79
Analog Devices Inc. has shown fluctuations in its inventory turnover ratio over the past five years. The inventory turnover ratio, which measures how efficiently a company is managing its inventory, decreased from 3.24 in 2019 to 2.33 in 2021, before increasing to 2.70 in 2023.
The decrease in the inventory turnover ratio from 2019 to 2021 may suggest that the company was holding onto its inventory for a longer period, which could tie up working capital and potentially lead to increased holding costs. However, the increase in the ratio in 2023 indicates an improvement in the management of its inventory.
It is important to consider the industry in which Analog Devices operates, as well as any specific factors that may have contributed to the fluctuations in inventory turnover. Further analysis of the company's inventory management practices and industry benchmarks would provide a comprehensive understanding of the reasons behind these changes.
Peer comparison
Oct 28, 2023