Digi International Inc (DGII)

Inventory turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	192,646	171,939	141,975	135,299	135,168
Inventory	US$ in thousands	74,396	73,223	43,921	51,568	39,764
Inventory turnover		2.59	2.35	3.23	2.62	3.40

September 30, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $192,646K ÷ $74,396K
= 2.59

Inventory turnover measures how many times a company's inventory is sold and replenished over a specific period. Digi International, Inc.'s inventory turnover has fluctuated over the past five years, with the ratio standing at 2.54 in 2023, 2.28 in 2022, 3.13 in 2021, 2.54 in 2020, and 3.32 in 2019. The declining trend in inventory turnover from 2019 to 2021 followed by a slight increase in 2023 suggests that the company may have experienced challenges in managing its inventory efficiently. A lower inventory turnover can indicate potential overstocking or slow-moving inventory, which could tie up capital and lead to increased carrying costs. Conversely, a significantly high turnover may suggest potential stockouts or inadequate inventory levels. Further analysis of industry benchmarks and the company's operational changes may provide valuable insights into the underlying reasons for these fluctuations in inventory turnover.