Cisco Systems Inc (CSCO)

Inventory turnover

		Jul 31, 2024	Jul 27, 2024	Jul 31, 2023	Jul 29, 2023	Jul 31, 2022
Cost of revenue	US$ in thousands	18,975,000	33,782,000	21,245,000	34,408,000	19,309,000
Inventory	US$ in thousands	3,373,000	3,373,000	3,644,000	3,644,000	2,568,000
Inventory turnover		5.63	10.02	5.83	9.44	7.52

July 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $18,975,000K ÷ $3,373,000K
= 5.63

Inventory turnover measures how efficiently a company manages its inventory by evaluating how many times it sells and replaces its inventory during a specific period. For Cisco Systems Inc, the inventory turnover has shown fluctuations over the past five years.

In July 2022, the inventory turnover was 7.52, indicating that Cisco sold and replaced its inventory approximately 7.52 times during that year. The following year, in July 2023, the inventory turnover improved significantly to 9.44, reflecting more efficient inventory management. However, by the end of July 2023, the inventory turnover decreased to 5.83, suggesting a slowdown in inventory turnover efficiency.

The trend reversed in July 2024, with the inventory turnover increasing to 10.02, showcasing increased efficiency in managing inventory turnover. However, by the end of July 2024, the inventory turnover dropped to 5.63, indicating a decrease in inventory turnover efficiency compared to the previous year.

Overall, Cisco Systems Inc's inventory turnover has shown variability, with periods of improvement followed by declines. It is essential for the company to closely monitor and manage its inventory levels to ensure a balance between meeting customer demand and avoiding excess inventory holding costs.