Materion Corporation (MTRN)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,605,750 | 1,503,030 | 1,610,150 | 1,407,620 | 1,158,240 |
| Inventory | US$ in thousands | 441,299 | 441,597 | 423,080 | 361,115 | 250,778 |
| Inventory turnover | 3.64 | 3.40 | 3.81 | 3.90 | 4.62 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,605,750K ÷ $441,299K
= 3.64
The inventory turnover ratio for Materion Corporation has shown a gradual decrease over the past five years. In December 31, 2020, the ratio stood at 4.62, indicating that the company turned over its inventory approximately 4.62 times during that year. However, by December 31, 2024, the ratio had declined to 3.64, suggesting that the company was turning over its inventory at a slower pace.
A decreasing inventory turnover ratio can have various implications. It may suggest that Materion Corporation is facing challenges in managing its inventory efficiently or might be carrying excess inventory levels. This could tie up working capital and lead to higher carrying costs, potentially impacting the company's profitability.
It would be important for Materion Corporation to address the factors contributing to the declining inventory turnover ratio to optimize its inventory management practices and improve overall operational efficiency.