Hormel Foods Corporation (HRL)
Inventory turnover
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 10,927,900 | 11,106,700 | 11,200,600 | 10,337,000 | 8,566,050 |
| Inventory | US$ in thousands | 1,576,300 | 1,680,410 | 1,716,060 | 1,369,200 | 1,072,760 |
| Inventory turnover | 6.93 | 6.61 | 6.53 | 7.55 | 7.99 |
October 27, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $10,927,900K ÷ $1,576,300K
= 6.93
Hormel Foods Corporation has shown a consistent trend in inventory turnover over the past five years. The inventory turnover ratio indicates the company's efficiency in managing its inventory levels. The ratios have ranged from 6.53 to 7.99 during this period.
The higher the inventory turnover ratio, the more efficiently the company is selling its inventory. In Hormel Foods' case, the inventory turnover has generally been moderate to high, indicating that the company is effectively managing its inventory and turning it into sales.
A higher inventory turnover ratio can suggest strong demand for the company's products, effective inventory management practices, and a shorter cash-to-cash cycle. This can be positive for the company's liquidity and profitability as it reduces the risk of excess inventory holding costs.
Overall, the consistent inventory turnover ratios of Hormel Foods Corporation over the past five years reflect well on the company's operational efficiency in managing its inventory levels.