Broadcom Inc (AVGO)

Inventory turnover

		Nov 3, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020
Cost of revenue	US$ in thousands	19,065,000	11,129,000	11,108,000	10,606,000	10,372,000
Inventory	US$ in thousands	1,760,000	1,898,000	1,925,000	1,297,000	1,003,000
Inventory turnover		10.83	5.86	5.77	8.18	10.34

November 3, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $19,065,000K ÷ $1,760,000K
= 10.83

Based on the inventory turnover data provided for Broadcom Inc over the past five years, we can observe fluctuations in the efficiency of managing its inventory. The inventory turnover ratio represents how many times a company sells and replaces its inventory within a specific period.

In the most recent fiscal year ending on November 3, 2024, Broadcom Inc achieved an inventory turnover ratio of 10.83. This indicates that the company effectively converted its inventory into sales approximately 10.83 times during the year. The notable increase in inventory turnover from the previous years suggests improved inventory management efficiency.

In the preceding years, the inventory turnover ratios were 5.86 in Oct 29, 2023, 5.77 in Oct 30, 2022, 8.18 in Oct 31, 2021, and 10.34 in Nov 1, 2020. The lower turnover ratios in 2022 and 2023 may indicate challenges in managing inventory levels efficiently, potentially leading to excess or obsolete inventory. However, the subsequent increase in turnover in 2024 reflects possible enhancements in inventory management practices.

Overall, a high inventory turnover ratio, such as the one observed in 2024, is generally favorable as it signifies effective inventory control and swift sales cycles. However, it is crucial for Broadcom Inc to maintain a balance to avoid stockouts or insufficient inventory levels. Monitoring inventory turnover consistently can help the company optimize its inventory management practices and enhance operational efficiency.