Balchem Corporation (BCPC)
Inventory turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 620,383 | 630,569 | 653,002 | 663,916 | 661,907 | 647,082 | 608,180 | 586,281 | 555,849 | 530,677 | 512,514 | 487,571 | 479,747 | 468,033 | 453,848 | 443,509 | 432,338 | 432,371 | 434,825 | 437,410 |
| Inventory | US$ in thousands | 109,521 | 116,346 | 124,949 | 124,768 | 119,668 | 139,464 | 140,840 | 108,411 | 91,058 | 81,925 | 78,333 | 77,022 | 70,620 | 77,430 | 81,546 | 83,196 | 83,893 | 73,830 | 68,430 | 66,764 |
| Inventory turnover | 5.66 | 5.42 | 5.23 | 5.32 | 5.53 | 4.64 | 4.32 | 5.41 | 6.10 | 6.48 | 6.54 | 6.33 | 6.79 | 6.04 | 5.57 | 5.33 | 5.15 | 5.86 | 6.35 | 6.55 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $620,383K ÷ $109,521K
= 5.66
Balchem Corp.'s inventory turnover ratio has displayed consistency over the past eight quarters, ranging from 4.32 to 5.66. The inventory turnover ratio measures how efficiently the company manages its inventory by indicating how many times it sells and replaces its inventory within a specific period. A higher turnover ratio generally suggests effective inventory management, as seen in Balchem's case with ratios consistently above 5.
The increasing trend from Q3 2022 to Q4 2023 indicates a positive development in inventory management efficiency. This improvement could stem from better demand forecasting, streamlined operations, or effective inventory control measures. Balchem's ability to consistently maintain a turnover ratio above 5 signifies that it is efficiently managing its inventory levels, reducing carrying costs and minimizing the risk of obsolescence.
However, it is essential for Balchem to strike a balance in setting inventory levels to avoid stockouts while preventing excess or obsolete inventory. Regular monitoring and analysis of inventory turnover ratios can help the company optimize working capital and enhance overall operational efficiency.
Peer comparison
Dec 31, 2023
Dec 31, 2023