Ingevity Corp (NGVT)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,612,400 | 1,335,600 | 1,091,900 | 944,600 | 1,029,600 |
| Inventory | US$ in thousands | 308,800 | 335,000 | 241,200 | 189,000 | 212,500 |
| Inventory turnover | 5.22 | 3.99 | 4.53 | 5.00 | 4.85 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,612,400K ÷ $308,800K
= 5.22
The inventory turnover ratio measures how efficiently a company manages its inventory by indicating the number of times inventory is sold and replaced within a specific period. Ingevity Corp's inventory turnover has fluctuated over the past five years, ranging from 3.28 to 3.97.
In 2023, the inventory turnover ratio improved to 3.95 compared to the previous year's 3.28, suggesting the company sold and replaced its inventory more frequently during the year. This increase indicates a positive trend towards more efficient inventory management.
In comparison to 2021 and 2019, where the ratios were 3.64 and 3.82 respectively, 2023's ratio of 3.95 reflects a further improvement in the turnover of inventory.
However, it is worth noting that the inventory turnover ratio has slightly declined from the highest point recorded in 2020, which was 3.97. Despite this decrease, the current ratio still indicates a reasonable level of efficiency in managing inventory.
Overall, based on the trend in the inventory turnover ratio, Ingevity Corp appears to be effectively managing its inventory levels and achieving a balance between holding excess stock and meeting customer demand.
Peer comparison
Dec 31, 2023