Flex Ltd (FLEX)

Inventory turnover

		Mar 31, 2025	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
Cost of revenue (ttm)	US$ in thousands	23,654,000	23,477,000	23,976,000	24,768,000	25,674,000	26,937,000	27,649,000	28,018,000	28,081,000	27,506,000	26,461,000	25,050,000	24,109,000	23,520,000	23,633,000	23,459,000	22,437,780	21,799,640	21,589,550	21,898,510
Inventory	US$ in thousands	5,071,000	5,270,000	5,466,000	5,839,000	6,205,000	6,815,000	7,166,000	7,526,000	7,530,000	7,838,000	7,726,000	7,243,000	6,580,000	5,958,000	5,168,000	4,444,000	3,895,000	3,699,000	3,611,000	3,483,480
Inventory turnover		4.66	4.45	4.39	4.24	4.14	3.95	3.86	3.72	3.73	3.51	3.42	3.46	3.66	3.95	4.57	5.28	5.76	5.89	5.98	6.29

March 31, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $23,654,000K ÷ $5,071,000K
= 4.66

Flex Ltd's inventory turnover has shown a gradual decline over the reporting periods, indicating a decrease in the efficiency of managing its inventory. The inventory turnover ratio decreased from 6.29 on June 30, 2020, to 4.66 on March 31, 2025. This declining trend suggests that the company is taking longer to sell its inventory, which could be due to factors such as overstocking, slowing sales, or inefficient inventory management processes.

A lower inventory turnover ratio signifies that inventory is being held for a longer period, tying up capital and potentially leading to increased storage costs and obsolescence risk. Flex Ltd may need to reassess its inventory management strategies to improve efficiency and better align its inventory levels with customer demand. Additionally, a declining inventory turnover ratio could indicate potential challenges in forecasting demand or supply chain disruptions that are impacting the company's ability to efficiently move its inventory.