Compass Minerals International Inc (CMP)

Inventory turnover

		Jun 30, 2024	Mar 31, 2024	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	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
Cost of revenue (ttm)	US$ in thousands	356,600	365,800	263,700	183,200	175,700	175,300	179,300	185,100	160,800	408,900	394,700	398,200	413,400	174,300	211,400	209,500	210,000	206,200	143,400	135,800
Inventory	US$ in thousands	407,500	374,100	392,500	399,500	340,100	261,700	301,000	304,400	268,900	210,700	307,700	289,000	231,700	298,700	385,500	325,100	254,200	311,500	337,100	309,000
Inventory turnover		0.88	0.98	0.67	0.46	0.52	0.67	0.60	0.61	0.60	1.94	1.28	1.38	1.78	0.58	0.55	0.64	0.83	0.66	0.43	0.44

June 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $356,600K ÷ $407,500K
= 0.88

The inventory turnover ratio for Compass Minerals International Inc has shown fluctuating trends over the past few quarters. The ratio indicates the efficiency of the company in managing its inventory levels and converting them into sales. A low inventory turnover ratio could suggest overstocking or slow-moving inventory, potentially tying up working capital.

Analyzing the data, we observe that the inventory turnover ratio was relatively low in the recent quarters, with values below 1.0 for the last four quarters, indicating a longer time taken to sell off inventory. In particular, the ratio was at 0.67 in March 2023 and slightly improved to 0.98 in March 2024 before declining again to 0.88 in June 2024.

However, there was a significant uptick in inventory turnover in the first quarter of 2022, with a ratio of 1.94, which could indicate more efficient management of inventory during that period. Subsequently, the ratio fluctuated but generally remained below 1.0.

It is essential for the company to closely monitor its inventory levels and sales to optimize its inventory turnover ratio, ensuring efficient use of resources and avoiding potential inventory obsolescence or carrying costs. Further analysis of the company's operational processes and market demand could provide insights into improving inventory management practices.