MGP Ingredients Inc (MGPI)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 417,308 | 531,811 | 529,052 | 427,755 | 296,715 |
| Inventory | US$ in thousands | 364,944 | 346,853 | 289,722 | 245,944 | 141,011 |
| Inventory turnover | 1.14 | 1.53 | 1.83 | 1.74 | 2.10 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $417,308K ÷ $364,944K
= 1.14
The inventory turnover of MGP Ingredients Inc has shown a declining trend over the past five years. In December 31, 2020, the inventory turnover was 2.10, indicating that the company turned over its inventory 2.10 times during that year. However, by December 31, 2024, the inventory turnover had decreased to 1.14, suggesting that the company's efficiency in managing and selling its inventory had decreased significantly.
A decreasing inventory turnover may imply various issues such as overstocking, obsolescence, or declining sales. It may also indicate inefficiencies in the company's supply chain or production processes, leading to a buildup of inventory that is not being sold as quickly as before.
It is important for MGP Ingredients Inc to closely monitor its inventory turnover and take necessary actions to improve efficiency in inventory management. This could involve better demand forecasting, optimizing production processes, streamlining supply chain operations, or implementing inventory control measures to prevent excess inventory buildup.
Overall, a declining inventory turnover trend raises concerns about the company's operational efficiency and may warrant further investigation and corrective actions to enhance its inventory management practices.