IPG Photonics Corporation (IPGP)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	638,979	745,741	874,134	764,462	661,728
Inventory	US$ in thousands	284,780	453,874	509,363	460,747	364,993
Inventory turnover		2.24	1.64	1.72	1.66	1.81

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $638,979K ÷ $284,780K
= 2.24

The inventory turnover ratio for IPG Photonics Corporation has shown some fluctuation over the years. In 2020, the inventory turnover was 1.81, indicating that the company sold and replaced its inventory approximately 1.81 times during that year. However, the ratio decreased slightly to 1.66 in 2021 before increasing to 1.72 in 2022. In 2023, there was a slight decline to 1.64, but the ratio significantly improved to 2.24 in 2024.

The inventory turnover ratio measures how efficiently a company manages its inventory by showing how many times the company sells and replaces its inventory in a given period. A higher ratio indicates better inventory management and liquidity, as the company is selling its inventory more quickly.

The increase in inventory turnover from 2023 to 2024 suggests that IPG Photonics Corporation was able to sell its inventory more efficiently in 2024 compared to the previous year. This could be attributed to improved inventory management practices, better demand forecasting, or effective inventory control measures.

Overall, while there have been some fluctuations in the inventory turnover ratio for IPG Photonics Corporation, the general trend indicates improvements in inventory management efficiency, which is a positive signal for the company's operations.