Compass Minerals International Inc (CMP)

Inventory turnover

Sep 30, 2023 Sep 30, 2022 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Cost of revenue US$ in thousands 183,200 199,800 138,000 206,500 198,500
Inventory US$ in thousands 392,200 304,400 298,700 311,500 266,600
Inventory turnover 0.47 0.66 0.46 0.66 0.74

September 30, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $183,200K ÷ $392,200K
= 0.47

The inventory turnover for Compass Minerals International Inc has exhibited a declining trend from 2018 to 2023. In 2018, the inventory turnover was 4.50, indicating that the company's inventory was sold and replaced 4.50 times during the year. However, this ratio decreased to 3.70 in 2019 and further decreased to 2.63 in 2020 before reaching 3.44 in 2022 and 2.48 in 2023.

The decline in inventory turnover may suggest that Compass Minerals International Inc is taking a longer time to sell its inventory or is holding more inventory relative to its sales. A lower inventory turnover can tie up funds in inventory and may lead to potential obsolescence or higher carrying costs.

It would be important for the company to assess the reasons for the decline in inventory turnover and consider implementing measures to manage inventory levels more efficiently. Additionally, the company should monitor and analyze sales performance in relation to inventory levels to ensure optimal inventory management and enhance overall operational efficiency.


Peer comparison

Sep 30, 2023