MKS Instruments Inc (MKSI)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	4,990,000	2,765,000	2,096,900	1,741,600	1,557,180
Inventory	US$ in thousands	991,000	977,000	577,000	501,400	462,100
Inventory turnover		5.04	2.83	3.63	3.47	3.37

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $4,990,000K ÷ $991,000K
= 5.04

MKS Instruments Inc's inventory turnover has shown an increasing trend over the past five years, indicating an improvement in the company's efficiency in managing its inventory levels. The inventory turnover ratio has increased from 3.37 in 2019 to 5.04 in 2023, suggesting that the company is selling its inventory more quickly relative to its cost of goods sold.

A higher inventory turnover ratio is generally seen as positive, as it indicates that the company is able to sell its products more efficiently, minimizing carrying costs and the risk of obsolescence. This upward trend in inventory turnover suggests that MKS Instruments Inc has been able to streamline its inventory management processes and optimize its supply chain operations.

Overall, the increasing inventory turnover ratio demonstrates MKS Instruments Inc's ability to effectively control its inventory levels and convert inventory into revenue at a faster pace, which can lead to improved liquidity and profitability in the long run.