Cadence Design Systems Inc (CDNS)

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	1,014,932	995,935	972,719	944,763	916,113	891,961	851,964	833,618	816,448	808,814	781,335	759,858	744,293	714,944	706,565	688,110	664,326	631,962	609,930	622,548
Inventory	US$ in thousands	181,661	163,693	139,576	127,566	128,005	114,283	106,372	110,213	115,721	101,575	90,479	76,592	75,956	47,979	43,924	60,575	55,802	66,745	49,299	37,480
Inventory turnover		5.59	6.08	6.97	7.41	7.16	7.80	8.01	7.56	7.06	7.96	8.64	9.92	9.80	14.90	16.09	11.36	11.91	9.47	12.37	16.61

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,014,932K ÷ $181,661K
= 5.59

Cadence Design Systems, Inc.'s inventory turnover has shown fluctuations over the past eight quarters. The trend indicates a generally decreasing pattern from Q1 2022 to Q1 2023, with a peak of 3.17 in Q2 2022. The lowest inventory turnover ratio of 2.39 was recorded in Q4 2023.

A declining inventory turnover ratio may suggest that the company is managing its inventory less efficiently or experiencing slower sales relative to the value of its inventory. This could potentially tie up capital in excess inventory, leading to increased holding costs and potentially lower liquidity.

Overall, Cadence Design Systems, Inc. should closely monitor its inventory turnover ratio to ensure optimal inventory management practices and align it with the company's sales and operational strategies.