IPG Photonics Corporation (IPGP)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	745,741	874,134	764,462	661,728	708,372
Inventory	US$ in thousands	453,874	509,363	460,747	364,993	380,790
Inventory turnover		1.64	1.72	1.66	1.81	1.86

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $745,741K ÷ $453,874K
= 1.64

The inventory turnover for IPG Photonics Corp has been trending downwards over the past five years. The company's inventory turnover ratio decreased from 1.86 in 2019 to 1.64 in 2023. This indicates that IPG Photonics Corp is taking longer to sell its inventory relative to its cost of goods sold, which could potentially tie up more capital in inventory.

A decreasing inventory turnover ratio may suggest inefficiencies in inventory management, such as overstocking, slow-moving inventory, or challenges in selling products. It could also indicate changing market conditions or customer preferences that are impacting the company's ability to turn inventory into sales quickly.

Overall, the decreasing trend in inventory turnover for IPG Photonics Corp warrants further investigation into the company's inventory management practices and potential strategies to optimize inventory levels to improve operational efficiency and financial performance.