Advanced Energy Industries Inc (AEIS)

Inventory turnover is a key financial ratio that indicates how effectively a company manages its inventory levels by measuring how many times the inventory is sold and replaced within a specific time period.

Looking at Advanced Energy Industries Inc.'s inventory turnover over the past five years, we observe a fluctuating trend. In 2019, the inventory turnover ratio was relatively low at 2.06, suggesting that the company took longer to sell and replenish its inventory. This may indicate issues with inventory management efficiency or overstocking.

In 2020, the inventory turnover ratio increased significantly to 3.95, indicating a considerable improvement in inventory management efficiency, as the company sold and replaced its inventory almost four times during the year. This could suggest better demand forecasting or supply chain management practices.

However, in 2021, the inventory turnover ratio decreased to 2.73, signaling a potential slowdown in inventory turnover compared to the previous year. This might indicate challenges in sales or production that led to inventory accumulation.

The ratio slightly improved in 2022 to 3.11, but remained below the level achieved in 2020. This indicates that the company might still be facing some issues in optimizing its inventory levels and turnover.

In 2023, the inventory turnover ratio increased further to 3.16, showing a slight improvement compared to the previous year. While the trend seems to be gradually recovering, it is essential for the company to consistently monitor and enhance its inventory management practices to ensure efficient operations and profitability.

Peer comparison

Dec 31, 2023