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.