MGP Ingredients Inc (MGPI)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 642,597 | 605,749 | 502,136 | 341,280 | 315,503 |
| Inventory | US$ in thousands | 346,853 | 289,722 | 245,944 | 141,011 | 136,931 |
| Inventory turnover | 1.85 | 2.09 | 2.04 | 2.42 | 2.30 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $642,597K ÷ $346,853K
= 1.85
The inventory turnover for MGP Ingredients, Inc. has exhibited a declining trend over the past five years. In 2023, the inventory turnover ratio was at 1.53, a decrease from the previous year's ratio of 1.83. This suggests that the company's inventory was turning over at a slower rate in 2023 compared to 2022.
Furthermore, when compared to the ratios from 2021, 2020, and 2019, we observe a consistent decrease in inventory turnover over the years. The decreasing trend in inventory turnover could indicate that MGP Ingredients, Inc. is carrying inventory for a longer period before it is sold, which may tie up company funds and potentially lead to increased holding costs or obsolescence risks.
Further analysis of the company's inventory management practices and supply chain efficiency would be beneficial to assess the reasons behind the decreasing trend in inventory turnover and identify potential areas for improvement.