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	399,500	304,400	298,700	311,500	266,600
Inventory turnover		0.46	0.66	0.46	0.66	0.74

September 30, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $183,200K ÷ $399,500K
= 0.46

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.