Diodes Incorporated (DIOD)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,293,680	1,485,450	1,425,160	1,016,520	1,001,730
Inventory	US$ in thousands	389,774	360,281	348,622	307,062	236,472
Inventory turnover		3.32	4.12	4.09	3.31	4.24

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,293,680K ÷ $389,774K
= 3.32

The inventory turnover of Diodes, Inc. indicates how efficiently the company is managing its inventory levels. A higher turnover ratio suggests that the company is selling its inventory more frequently, which is generally favorable as it minimizes holding costs and reduces the risk of inventory obsolescence.

Over the past five years, Diodes, Inc. has shown some fluctuation in its inventory turnover. In 2023, the inventory turnover ratio decreased to 2.57 from 3.26 in 2022. This indicates that the company's inventory turnover slowed down in 2023 compared to the previous year, possibly due to factors such as slower sales, excess inventory levels, or less efficient inventory management.

Comparing the 2023 ratio to that of 2021 and 2019, where the inventory turnover was also at 3.26 and 3.31 respectively, it is evident that there have been some variations in the company's inventory management over the years. It is important for Diodes, Inc. to investigate the reasons behind the decrease in inventory turnover in 2023 and identify areas for improvement to enhance efficiency in managing its inventory.