Digi International Inc (DGII)

Inventory turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cost of revenue	US$ in thousands	174,140	192,646	171,939	141,975	135,299
Inventory	US$ in thousands	53,357	74,396	73,223	43,921	51,568
Inventory turnover		3.26	2.59	2.35	3.23	2.62

September 30, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $174,140K ÷ $53,357K
= 3.26

The inventory turnover ratio for Digi International Inc has shown some fluctuation over the past five years. In the most recent fiscal year ending September 30, 2024, the inventory turnover ratio was 3.26, indicating that the company sold and replaced its inventory approximately 3.26 times during that year. This represents an improvement from the previous year's ratio of 2.59.

Compared to the ratios from the past five years, the inventory turnover has generally been on an upward trend. The highest turnover was in fiscal year 2024 while the lowest was in fiscal year 2022. This trend suggests the company has become more efficient in managing its inventory levels and converting them into sales over time.

A higher inventory turnover ratio typically indicates that a company is selling its inventory more quickly, which can be a positive sign of efficiency and effective management. It suggests that the company is effectively managing its inventory levels to meet customer demand without holding excessive amounts of inventory that could lead to potential obsolescence or increased storage costs.

Overall, Digi International Inc's inventory turnover ratio has exhibited improvement over the past five years, signaling a positive trend in the company's inventory management and operational efficiency.