Cisco Systems Inc (CSCO)

Inventory turnover

		Jul 27, 2024	Jul 29, 2023	Jul 30, 2022	Jul 31, 2021	Jul 25, 2020
Cost of revenue	US$ in thousands	33,782,000	34,408,000	30,820,000	30,409,000	29,372,000
Inventory	US$ in thousands	3,373,000	3,644,000	2,568,000	1,559,000	1,282,000
Inventory turnover		10.02	9.44	12.00	19.51	22.91

July 27, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $33,782,000K ÷ $3,373,000K
= 10.02

Inventory turnover is a key efficiency ratio that measures how effectively a company is managing its inventory. A higher inventory turnover ratio indicates that the company is selling its products more quickly and efficiently.

Analyzing the trend of inventory turnover for Cisco Systems Inc over the past five years, we observe a decrease in the ratio from 2020 to 2023, followed by a slight increase in 2024. In 2020, Cisco had an inventory turnover ratio of 22.91, which decreased to 19.51 in 2021, further dropping to 12.00 in 2022. However, in 2023, there was a slight improvement with a ratio of 9.44, and in 2024, the ratio increased to 10.02.

The decrease in inventory turnover ratio from 2020 to 2022 may indicate that Cisco held onto its inventory for a longer period, potentially due to overstocking or slowing sales. However, the uptick in 2024 suggests improved efficiency in managing and selling inventory.

Overall, while the recent improvement in inventory turnover is positive, Cisco may need to continue monitoring and managing its inventory effectively to ensure consistent performance in the future.