International Flavors & Fragrances Inc (IFF)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	14,214,000	14,345,000	11,599,000	4,157,110	4,126,320
Inventory	US$ in thousands	2,477,000	3,151,000	2,516,000	1,132,000	1,123,070
Inventory turnover		5.74	4.55	4.61	3.67	3.67

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $14,214,000K ÷ $2,477,000K
= 5.74

Inventory turnover is an important financial metric that indicates the efficiency of International Flavors & Fragrances Inc. in managing its inventory levels.

The trend of the inventory turnover ratio over the past five years shows some fluctuations. In 2023, the inventory turnover ratio improved to 3.15 compared to the previous year's 2.63, indicating that the company sold its inventory more frequently during the year. A higher inventory turnover ratio is generally seen as a positive sign as it suggests that the company is efficiently managing its inventory and turning it into sales.

Comparing the 2023 ratio to 2021 and 2019, where the ratio stood at 3.15 and 2.70 respectively, we can conclude that International Flavors & Fragrances Inc. has improved its inventory turnover efficiency over the years. This trend suggests that the company may be effectively managing its inventory levels, which could lead to lower carrying costs and better utilization of resources.

However, when compared to the ratio in 2020, which was 2.65, the inventory turnover in 2023 has improved, indicating that the company has made progress in optimizing its inventory management practices. Overall, the upward trend in inventory turnover ratio reflects positively on the company's operational efficiency and effectiveness in managing its inventory levels.