Cognex Corporation (CGNX)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	683,565	580,055	601,223	590,292	517,300
Inventory	US$ in thousands	157,527	162,285	122,480	113,102	60,830
Inventory turnover		4.34	3.57	4.91	5.22	8.50

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $683,565K ÷ $157,527K
= 4.34

The inventory turnover for Cognex Corporation has experienced fluctuations over the past five years. In 2020, the inventory turnover ratio stood at 8.50, indicating that the company's inventory was sold and replaced 8.50 times during the year.

However, this ratio decreased to 5.22 in 2021 and further declined to 4.91 in 2022. This suggests a potential inefficiency in managing inventory, as the turnover rate slowed down in these years.

In 2023, the inventory turnover ratio dropped to 3.57, indicating a significant decrease in the rate at which inventory was sold and replaced. This could imply excess inventory levels or challenges in selling products efficiently.

By the end of 2024, there was a slight improvement in the inventory turnover ratio, which increased to 4.34. While the ratio improved from the previous year, it is still lower than the levels observed in 2020.

Overall, the trend in the inventory turnover ratio for Cognex Corporation highlights the importance of optimizing inventory management to enhance operational efficiency and profitability. Efforts to streamline inventory processes and reduce excess stock levels may help in improving the turnover ratio and overall financial performance.