Lancaster Colony Corporation (LANC)
Inventory turnover
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,675,190 | 1,686,070 | 1,574,960 | 1,293,880 | 1,163,820 |
| Inventory | US$ in thousands | 173,252 | 158,265 | 144,702 | 121,875 | 85,048 |
| Inventory turnover | 9.67 | 10.65 | 10.88 | 10.62 | 13.68 |
June 30, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,675,190K ÷ $173,252K
= 9.67
Inventory turnover measures how many times a company's inventory is sold and replaced over a specific period. In the case of Lancaster Colony Corporation, its inventory turnover has exhibited a declining trend over the past five years.
The inventory turnover ratio decreased from 13.68 in 2020 to 9.67 in 2024. This decline suggests that the company's inventory is not being sold and replaced as quickly as before. A lower inventory turnover can indicate potential issues such as overstocking, slow-moving inventory, or difficulties in selling products.
While a high inventory turnover ratio is generally preferred as it signifies efficient inventory management, a significant decrease in this ratio over time may raise concerns about the company's sales performance and operational efficiency. Hence, Lancaster Colony Corporation may need to assess its inventory management practices and sales strategies to improve its inventory turnover in the future.
Peer comparison
Jun 30, 2024