Advanced Micro Devices Inc (AMD)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	19,158,000	18,025,000	19,508,000	10,360,000	6,723,000
Inventory	US$ in thousands	5,734,000	4,351,000	3,771,000	1,955,000	1,399,000
Inventory turnover		3.34	4.14	5.17	5.30	4.81

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $19,158,000K ÷ $5,734,000K
= 3.34

Advanced Micro Devices Inc's inventory turnover has been fluctuating over the past five years, indicating changes in the efficiency of managing its inventory.

Starting at 4.81 times in December 31, 2020, the turnover increased to 5.30 times by December 31, 2021, signaling an improvement in the company's ability to sell and replace its inventory within a specific period. However, by December 31, 2022, the turnover decreased slightly to 5.17 times, which could be due to changes in demand or inventory management practices.

In December 31, 2023, the inventory turnover dropped to 4.14 times, reflecting a potential slowdown in sales relative to the level of inventory held. This decrease may indicate inefficiencies in managing inventory levels or challenges in matching supply with demand.

By December 31, 2024, the turnover further decreased to 3.34 times, suggesting that the company took longer to sell and replenish its inventory compared to the previous years. A declining inventory turnover may raise concerns about obsolete inventory, storage costs, and potential liquidity issues if inventory is not efficiently converted into sales.

Overall, fluctuations in Advanced Micro Devices Inc's inventory turnover highlight the importance of effective inventory management to optimize working capital, reduce carrying costs, and ensure the company remains competitive in its industry.