Novanta Inc (NOVT)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 772,915 | 708,151 | 698,874 | 598,934 | 499,762 |
| Inventory | US$ in thousands | 144,606 | 149,371 | 167,997 | 125,657 | 92,737 |
| Inventory turnover | 5.34 | 4.74 | 4.16 | 4.77 | 5.39 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $772,915K ÷ $144,606K
= 5.34
Novanta Inc's inventory turnover has shown a fluctuating trend over the five-year period from December 31, 2020, to December 31, 2024. The inventory turnover ratio indicates the efficiency with which the company manages its inventory levels.
Initially, in December 2020, the inventory turnover ratio stood at 5.39, indicating that the company was able to turn over its inventory approximately 5.39 times during that year. This suggests efficient inventory management and indicates that Novanta was able to sell through its inventory effectively.
Subsequently, there was a decrease in the inventory turnover ratio to 4.77 by December 31, 2021. This decline may suggest either a buildup of excess inventory relative to sales or a slower rate of sales compared to the inventory volume on hand.
The trend continued with a further reduction in the inventory turnover ratio to 4.16 by December 31, 2022. This could indicate potential inventory management challenges or a mismatch between inventory levels and sales demand during that period.
However, there was a slight improvement in inventory turnover to 4.74 by December 31, 2023, suggesting a more efficient management of inventory relative to the previous year.
By December 31, 2024, the inventory turnover ratio increased to 5.34, potentially indicating a more optimal balance between inventory levels and sales activity, leading to a higher turnover rate.
Overall, Novanta Inc's inventory turnover has shown variability over the years, with fluctuations that may reflect changes in sales activity, inventory management strategies, market demand, or operational efficiency. It is crucial for the company to monitor and analyze these trends to ensure effective utilization of its inventory resources.
Peer comparison
Dec 31, 2024