Applied Materials Inc (AMAT)

Inventory turnover

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020	Oct 27, 2019	Jul 28, 2019	Apr 28, 2019
Cost of revenue (ttm)	US$ in thousands	15,993,000	16,034,000	16,093,000	16,128,000	15,846,000	15,471,000	14,911,000	14,563,000	14,134,000	13,204,000	12,554,000	11,440,000	10,403,000	9,894,000	9,072,000	8,637,000	8,438,000	8,222,000	8,204,000	8,497,000
Inventory	US$ in thousands	5,646,000	5,725,000	5,809,000	5,940,000	6,054,000	5,932,000	5,506,000	5,009,000	4,526,000	4,309,000	4,117,000	4,053,000	3,925,000	3,904,000	3,952,000	3,725,000	3,472,000	3,474,000	3,539,000	3,677,000
Inventory turnover		2.83	2.80	2.77	2.72	2.62	2.61	2.71	2.91	3.12	3.06	3.05	2.82	2.65	2.53	2.30	2.32	2.43	2.37	2.32	2.31

January 28, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $15,993,000K ÷ $5,646,000K
= 2.83

Applied Materials Inc. has exhibited stable inventory turnover levels over the past eight quarters. The inventory turnover ratio measures how efficiently the company manages its inventory to generate sales. From Q2 2022 to Q1 2024, the inventory turnover ratio has ranged from 2.32 to 2.60, indicating that on average, the company turns over its inventory approximately 2.4 times to 2.6 times a year.

The trend shows a slight fluctuation, with a peak of 2.60 in Q2 2022 and a low of 2.32 in Q1 2023. Overall, Applied Materials Inc. has maintained a consistent level of efficiency in managing its inventory turnover, which suggests effective inventory management practices.

However, it is worth noting that a higher inventory turnover ratio is generally preferable as it indicates that the company is selling goods quickly and not holding excessive inventory. Applied Materials Inc. may seek to improve its inventory turnover further to enhance its liquidity and optimize its working capital management.