Digi International Inc (DGII)

Inventory turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	189,850	192,646	191,217	188,891	183,348	171,939	161,676	152,108	146,223	141,974	141,145	137,611	135,573	135,299	134,013	133,862	134,491	135,168	135,308	135,094
Inventory	US$ in thousands	67,590	74,396	83,605	83,065	80,993	73,223	61,687	51,672	51,874	43,921	47,263	51,407	54,757	51,568	46,550	43,280	47,380	39,764	41,796	44,035
Inventory turnover		2.81	2.59	2.29	2.27	2.26	2.35	2.62	2.94	2.82	3.23	2.99	2.68	2.48	2.62	2.88	3.09	2.84	3.40	3.24	3.07

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $189,850K ÷ $67,590K
= 2.81

The inventory turnover for Digi International, Inc. has shown some fluctuations over the past eight quarters. The company's inventory turnover ratio ranged from 2.20 to 2.85 during this period. The average inventory turnover ratio for the eight quarters is around 2.48.

A higher inventory turnover ratio indicates that the company is selling its inventory more quickly, which is generally favorable as it reduces the risk of holding excess or obsolete inventory. On the other hand, a lower turnover ratio could suggest inefficiencies in inventory management or a decline in sales.

In Q2 2024, Digi International, Inc. experienced an inventory turnover of 2.75, which was higher than the average turnover for the eight quarters. This could imply efficient inventory management or an increase in sales volume during that quarter.

In contrast, the lowest inventory turnover ratio of 2.20 was observed in Q1 2023, signaling a relatively slower rate of inventory turnover during that period. It is essential for the company to monitor inventory levels closely and adjust their operations accordingly to optimize inventory turnover and minimize carrying costs.

Overall, while the inventory turnover ratios of Digi International, Inc. have fluctuated, the company should strive to maintain a balance between stocking enough inventory to meet demand and avoiding excessive inventory buildup to ensure efficient operations and healthy financial performance.