ELF Beauty Inc (ELF)

Inventory turnover

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Cost of revenue	US$ in thousands	892,964	515,001	370,285	317,507	259,201
Inventory	US$ in thousands	191,489	81,323	84,498	56,810	46,209
Inventory turnover		4.66	6.33	4.38	5.59	5.61

March 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $892,964K ÷ $191,489K
= 4.66

ELF Beauty Inc's inventory turnover has exhibited fluctuations over the last five years. The inventory turnover ratio decreased from 5.61 in March 2020 to 4.38 in March 2022 before increasing to 6.33 in March 2023. However, in the most recent fiscal year ending March 31, 2024, the inventory turnover ratio declined to 4.66.

A lower inventory turnover ratio indicates that the company is selling its inventory at a slower rate, which could potentially lead to excess inventory levels or obsolete stock. On the other hand, a higher inventory turnover ratio suggests that the company is efficiently managing its inventory and quickly converting it into sales.

The decreasing trend in inventory turnover from 2023 to 2024 may raise concerns about the company's ability to efficiently manage its inventory levels. Further analysis of the reasons behind this decline, such as changes in demand patterns, production inefficiencies, or supply chain disruptions, would be necessary to assess the implications for the company's overall operations and financial performance.