MP Materials Corp (MP)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 270,643 | 148,423 | 110,574 | 100,635 | 102,398 |
| Inventory | US$ in thousands | 107,905 | 95,182 | 57,554 | 38,692 | 32,272 |
| Inventory turnover | 2.51 | 1.56 | 1.92 | 2.60 | 3.17 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $270,643K ÷ $107,905K
= 2.51
MP Materials Corp's inventory turnover has exhibited fluctuations over the past five years. As of December 31, 2020, the company's inventory turnover stood at 3.17, indicating that it turned over its inventory approximately 3.17 times during that year. However, there was a decline in inventory turnover to 2.60 by December 31, 2021, suggesting a slower rate of inventory turnover.
The trend continued as the inventory turnover decreased further to 1.92 by December 31, 2022, and 1.56 by December 31, 2023. These lower inventory turnover ratios may raise concerns about the company's inventory management efficiency and liquidity.
It is worth noting that there was a notable improvement in inventory turnover to 2.51 by December 31, 2024, indicating a recovery in the company's inventory management practices.
Overall, the decreasing trend in inventory turnover from 2020 to 2023 raises questions about the company's inventory management strategies. Investors and stakeholders should monitor future inventory turnover ratios to assess whether the company is effectively managing its inventory levels to support its operations and financial performance.
Peer comparison
Dec 31, 2024