Cinemark Holdings Inc (CNK)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 63,900 | 94,700 | 241,400 | 424,538 | 438,242 |
| Inventory | US$ in thousands | 31,000 | 23,300 | 23,700 | 15,500 | 12,593 |
| Inventory turnover | 2.06 | 4.06 | 10.19 | 27.39 | 34.80 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $63,900K ÷ $31,000K
= 2.06
Based on the data provided, Cinemark Holdings Inc's inventory turnover has been decreasing over the years. In 2020, the inventory turnover was 34.80, indicating that the company's inventory was sold and replaced approximately 34.80 times during the year. However, this ratio decreased to 27.39 in 2021, 10.19 in 2022, 4.06 in 2023, and further declined to 2.06 in 2024.
The declining trend in inventory turnover suggests that Cinemark Holdings Inc may be facing challenges in managing its inventory efficiently. A lower inventory turnover ratio can indicate potential issues like overstocking, obsolete inventory, or slowing sales. It may also suggest that the company is experiencing difficulties in selling its products, leading to inventory sitting idle for longer periods.
Cinemark Holdings Inc should closely monitor its inventory management practices to improve the turnover ratio and optimize its inventory levels. Efficient inventory management can help reduce carrying costs, prevent inventory obsolescence, and enhance cash flow by converting inventory into sales more swiftly.
Overall, the decreasing trend in inventory turnover for Cinemark Holdings Inc raises concerns about the company's inventory management efficiency and highlights the need for strategic improvements in this area to enhance operational performance and profitability.