Liquidity Services Inc (LQDT)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	225,761	223,818	219,797	210,294	198,965	194,854	190,037	188,995	183,355	175,496	167,339	157,908	159,674	162,485	168,906	176,915	150,578	127,074	44,653	27,149
Inventory	US$ in thousands	14,465	11,116	12,541	15,290	16,369	11,679	14,355	13,079	13,225	12,468	13,799	13,124	9,931	5,607	7,415	8,491	5,808	5,843	8,891	13,050
Inventory turnover		15.61	20.13	17.53	13.75	12.15	16.68	13.24	14.45	13.86	14.08	12.13	12.03	16.08	28.98	22.78	20.84	25.93	21.75	5.02	2.08

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $225,761K ÷ $14,465K
= 15.61

Liquidity Services Inc's inventory turnover ratio has shown variability over the past eight quarters. The inventory turnover ratio measures how efficiently a company is managing its inventory by indicating how many times a company sells and replaces its inventory within a given period.

Looking at the trend, we observe that the Q4 2023 and Q3 2023 values of 12.80 and 11.25, respectively, indicate a higher turnover rate compared to previous quarters. This implies that the company is selling and replacing inventory at a faster pace during these periods, which might suggest effective inventory management or higher demand for their offerings.

However, the Q1 2023 and Q2 2023 values of 7.54 and 8.82, respectively, show a lower inventory turnover rate which could indicate slower sales or inefficient inventory management during those quarters.

On average, the inventory turnover ratio for Liquidity Services Inc over the analyzed period stands at approximately 9.93. This suggests that, on average, the company is turning over its inventory almost 10 times a year.

It is important for the company to consistently monitor and manage its inventory turnover ratio to ensure optimal inventory levels, minimize carrying costs, and meet customer demand efficiently. Fluctuations in the ratio may indicate changes in market demand, operational inefficiencies, or issues with inventory management that require attention and action.