Ichor Holdings Ltd (ICHR)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 745,706 | 707,724 | 1,068,200 | 919,437 | 789,344 |
| Inventory | US$ in thousands | 250,102 | 245,885 | 283,660 | 236,133 | 134,756 |
| Inventory turnover | 2.98 | 2.88 | 3.77 | 3.89 | 5.86 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $745,706K ÷ $250,102K
= 2.98
The inventory turnover for Ichor Holdings Ltd has shown a declining trend over the years. In December 31, 2020, the inventory turnover was 5.86 times, indicating that the company sold and replaced its inventory nearly 6 times during the year. However, by December 31, 2024, the inventory turnover had decreased to 2.98 times, suggesting a slowdown in the rate at which the company is moving its inventory.
A decreasing inventory turnover ratio could be a sign of overstocking, obsolescence, or poor sales performance. It implies that the company is taking longer to sell its inventory, which can tie up cash and lead to increased holding costs.
It is important for Ichor Holdings Ltd to closely monitor and manage its inventory levels effectively to improve its inventory turnover ratio and optimize its working capital efficiency. Taking steps to streamline inventory management, improve sales strategies, and assess demand forecasting can help the company enhance its operational performance and financial health.
Peer comparison
Dec 31, 2024