ESCO Technologies Inc (ESE)
Inventory turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 580,377 | 525,457 | 445,045 | 458,311 | 437,998 |
| Inventory | US$ in thousands | 184,067 | 162,403 | 147,148 | 135,296 | 124,956 |
| Inventory turnover | 3.15 | 3.24 | 3.02 | 3.39 | 3.51 |
September 30, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $580,377K ÷ $184,067K
= 3.15
Based on the data provided, Esco Technologies, Inc.'s inventory turnover has displayed fluctuations over the past five years. The inventory turnover ratio represents the company's efficiency in managing its inventory levels and is calculated by dividing the cost of goods sold by the average inventory for a specific period.
The trend in Esco Technologies, Inc.'s inventory turnover ratio shows a slight decrease from 3.95 in 2019 to 3.15 in 2023, with fluctuations in intermediate years. A declining inventory turnover may indicate potential issues such as overstocking, slow-moving inventory, or inefficiencies in sales and production processes.
While a high inventory turnover ratio is generally preferred as it signifies that inventory is efficiently sold and replenished, a lower ratio may prompt further investigation into the reasons behind the decline. It is essential to analyze the company's industry, business model, and any changes in sales, purchasing, or production processes that may have contributed to the fluctuating inventory turnover ratio observed over the years.
Peer comparison
Sep 30, 2023