Applied Materials Inc (AMAT)
Inventory turnover
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 16,468,000 | 16,276,000 | 15,670,000 | 13,929,000 | 10,979,000 |
| Inventory | US$ in thousands | 5,421,000 | 5,725,000 | 5,932,000 | 4,309,000 | 3,904,000 |
| Inventory turnover | 3.04 | 2.84 | 2.64 | 3.23 | 2.81 |
October 27, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $16,468,000K ÷ $5,421,000K
= 3.04
Inventory turnover is a key financial ratio that indicates how efficiently a company manages its inventory. It is calculated by dividing the cost of goods sold by the average inventory balance. A higher inventory turnover ratio generally indicates better inventory management and faster sales.
Based on the data provided for Applied Materials Inc from 2020 to 2024, we observe fluctuations in the inventory turnover ratio. In 2024, the ratio stands at 3.04, showing an improvement compared to the previous year's ratio of 2.84 in 2023. This increase suggests that Applied Materials Inc is selling its inventory more efficiently in 2024.
However, in 2022, the inventory turnover ratio decreased to 2.64, indicating a potential slowdown in inventory management efficiency compared to the previous year. The ratio then rebounded in 2023 before further improving in 2024.
Overall, Applied Materials Inc has demonstrated varying levels of efficiency in managing its inventory over the past five years. It is essential for the company to continue monitoring and optimizing its inventory control processes to ensure consistent and efficient performance in the future.
Peer comparison
Oct 27, 2024