Innospec Inc (IOSP)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,765,000 | 1,751,700 | 1,332,200 | 1,159,900 | 1,352,700 |
| Inventory | US$ in thousands | 300,100 | 373,100 | 277,600 | 220,000 | 244,600 |
| Inventory turnover | 5.88 | 4.69 | 4.80 | 5.27 | 5.53 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,765,000K ÷ $300,100K
= 5.88
The inventory turnover ratio for Innospec Inc has been relatively stable over the past five years, with values ranging from 3.69 to 4.52. This ratio indicates how efficiently the company manages its inventory by measuring the number of times inventory is sold and replaced within a specific period. A higher turnover ratio suggests that the company sells its inventory quickly, which is generally favorable as it minimizes holding costs and reduces the risk of obsolescence.
Innospec Inc's inventory turnover has shown a slight increase in 2023 compared to the prior year, reaching 4.52. This improvement may indicate better inventory management practices or increased sales efficiency during the year. However, it's important to consider the industry norms and the company's specific circumstances when evaluating the significance of this change. Overall, maintaining a stable or increasing inventory turnover ratio over time is a positive indicator of operational efficiency and effective inventory control for Innospec Inc.
Peer comparison
Dec 31, 2023