Keysight Technologies Inc (KEYS)
Inventory turnover
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,341,000 | 3,371,000 | 3,255,000 | 2,991,000 | 3,143,000 |
| Inventory | US$ in thousands | 985,000 | 858,000 | 777,000 | 757,000 | 705,000 |
| Inventory turnover | 3.39 | 3.93 | 4.19 | 3.95 | 4.46 |
October 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,341,000K ÷ $985,000K
= 3.39
Keysight Technologies Inc's inventory turnover has shown a declining trend over the past five years. The inventory turnover ratio measures the company's efficiency in managing its inventory and indicates how many times the company's inventory is sold and replaced in a given period. A higher turnover ratio is generally preferred as it signifies that inventory is being managed efficiently.
In 2019, the inventory turnover ratio was at its peak at 2.51, indicating that the company's inventory was turned over 2.51 times during the year. However, this ratio started declining in subsequent years. By 2023, the ratio had decreased to 1.96, suggesting that the company's inventory turnover had slowed down significantly.
A declining inventory turnover ratio could indicate potential issues with inventory management, such as overstocking, slow-moving inventory, or difficulties in sales and production processes. It may also suggest a decrease in demand for the company's products or a failure to adapt to changing market conditions.
Further analysis of the company's operations and industry benchmarks would be necessary to determine the specific reasons behind the declining inventory turnover and to develop strategies for improvement.
Peer comparison
Oct 31, 2023