Knowles Cor (KN)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 424,200 | 488,400 | 508,600 | 493,100 | 526,800 |
| Inventory | US$ in thousands | 196,400 | 169,500 | 153,100 | 130,100 | 141,800 |
| Inventory turnover | 2.16 | 2.88 | 3.32 | 3.79 | 3.72 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $424,200K ÷ $196,400K
= 2.16
The inventory turnover ratio for Knowles Corp has shown a decreasing trend over the past five years. The ratio was 3.70 in 2019, indicating that the company sold its entire inventory almost 3.7 times during that year. However, the ratio decreased to 3.77 in 2020, 3.32 in 2021, 2.69 in 2022, and further dropped to 2.22 in 2023.
A decreasing inventory turnover ratio may suggest inefficiencies in managing and selling inventory. It could indicate overstocking, slow-moving inventory, or challenges in accurately forecasting demand. This could potentially lead to higher carrying costs, risk of obsolescence, and reduced profitability.
It is important for Knowles Corp to address the factors contributing to the decreasing trend in inventory turnover to optimize its inventory management processes and improve operational efficiency. This could involve streamlining inventory levels, enhancing demand forecasting capabilities, and improving inventory turnover through effective sales and marketing strategies.
Peer comparison
Dec 31, 2023