Alpha and Omega Semiconductor Ltd (AOSL)

Inventory turnover

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cost of revenue	US$ in thousands	485,356	491,785	508,996	452,359	362,178
Inventory	US$ in thousands	195,750	183,247	158,040	154,293	135,528
Inventory turnover		2.48	2.68	3.22	2.93	2.67

June 30, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $485,356K ÷ $195,750K
= 2.48

Inventory turnover measures how efficiently a company manages its inventory by calculating the number of times inventory is sold and replaced within a specific period. A higher inventory turnover ratio indicates better efficiency in inventory management.

Analyzing Alpha and Omega Semiconductor Ltd's inventory turnover over the past five years shows a fluctuating trend. The ratio decreased from 2.67 in 2020 to 2.48 in 2024, with a peak of 3.22 in 2022.

A decreasing inventory turnover ratio could suggest potential issues such as overstocking, slow-moving inventory, or challenges in demand forecasting. It may indicate that the company is holding onto inventory for longer periods, tying up capital and potentially increasing the risk of obsolescence.

However, it is essential to consider the nature of the industry and the company's business model when interpreting inventory turnover ratios. Comparing Alpha and Omega Semiconductor Ltd's inventory turnover with industry benchmarks or competitors can provide additional insights into its inventory management efficiency.