Kellanova (K)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	8,204,000	6,949,000	7,037,000	7,263,000	7,452,000	9,433,000	10,081,000	10,545,000	10,700,000	10,442,000	10,106,000	9,716,000	9,621,000	9,485,000	9,256,000	9,193,000	9,043,000	8,899,000	9,043,000	9,050,000
Inventory	US$ in thousands	1,165,000	1,219,000	1,185,000	1,210,000	1,243,000	1,632,000	1,706,000	1,801,000	1,339,000	1,682,000	1,678,000	1,559,000	1,398,000	1,378,000	1,365,000	1,319,000	1,284,000	1,263,000	1,230,000	1,189,000
Inventory turnover		7.04	5.70	5.94	6.00	6.00	5.78	5.91	5.86	7.99	6.21	6.02	6.23	6.88	6.88	6.78	6.97	7.04	7.05	7.35	7.61

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $8,204,000K ÷ $1,165,000K
= 7.04

The inventory turnover ratio for Kellanova over the past few years has shown a gradual decrease from 7.61 on March 31, 2020, to 5.70 on September 30, 2024. This indicates that the company is holding inventory for a longer period before selling it. A lower inventory turnover ratio may suggest inefficiency in managing inventory, which can lead to higher carrying costs and potential obsolescence risks.

It is important for Kellanova to analyze the reasons behind this declining trend in inventory turnover. Factors such as overstocking, slow-moving inventory, ineffective inventory management practices, or changes in customer demand patterns could contribute to this decrease. By identifying the root causes, Kellanova can take necessary steps to optimize its inventory levels, improve supply chain efficiency, and enhance overall operational performance.

Additionally, a low inventory turnover ratio may impact the company's cash flow and profitability, as excess inventory ties up capital that could be utilized elsewhere. It is crucial for Kellanova to strike a balance between maintaining adequate inventory levels to meet customer demand and ensuring efficient inventory turnover to maximize profitability and liquidity. Regular monitoring and adjustment of inventory management strategies can help Kellanova address any inefficiencies and improve its overall financial performance.