Diodes Incorporated (DIOD)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	882,922	864,731	881,431	936,968	1,003,557	1,083,350	1,138,034	1,160,704	1,173,343	1,172,807	1,159,543	1,145,743	1,134,802	1,072,995	981,173	887,704	798,094	762,216	765,475	778,316
Inventory	US$ in thousands	474,948	482,038	461,539	429,363	389,774	343,694	325,733	341,941	360,281	374,811	371,351	370,045	348,622	322,088	304,128	289,972	307,062	260,289	255,828	232,184
Inventory turnover		1.86	1.79	1.91	2.18	2.57	3.15	3.49	3.39	3.26	3.13	3.12	3.10	3.26	3.33	3.23	3.06	2.60	2.93	2.99	3.35

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $882,922K ÷ $474,948K
= 1.86

Diodes Incorporated's inventory turnover has shown fluctuations over the analyzed periods. The inventory turnover ratio indicates how efficiently the company manages its inventory by measuring the number of times inventory is sold and replaced during a specific period. A higher inventory turnover generally suggests effective inventory management.

The trend in Diodes Incorporated's inventory turnover indicates some variability. The ratio ranged from a low of 1.79 in September 30, 2024, to a high of 3.49 in June 30, 2023. Initially, the turnover ratio decreased from 3.35 on March 31, 2020, to 3.10 on March 31, 2022, before increasing to 3.39 on March 31, 2023. Following this peak, the ratio declined to 1.91 on June 30, 2024, and further decreased to 1.86 on December 31, 2024.

The decreasing trend observed in recent periods can indicate possible issues with inventory management, such as overstocking, obsolete inventory, or challenges in selling products. A declining inventory turnover may also suggest inefficiencies in production or procurement processes, leading to excess inventory levels.

It would be advisable for Diodes Incorporated to further analyze the causes behind the decreasing trend in inventory turnover and take corrective actions to improve inventory management efficiency. Effective management of inventory levels can enhance working capital management, minimize storage costs, and optimize cash flow within the organization.