National Presto Industries Inc (NPK)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 273,460 | 266,498 | 291,381 | 267,705 | 236,585 |
| Inventory | US$ in thousands | 190,420 | 152,137 | 143,861 | 135,488 | 128,536 |
| Inventory turnover | 1.44 | 1.75 | 2.03 | 1.98 | 1.84 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $273,460K ÷ $190,420K
= 1.44
National Presto Industries Inc's inventory turnover has shown a decreasing trend over the past five years. The inventory turnover ratio measures how efficiently the company is managing its inventory by indicating the number of times inventory is sold and replaced over a specific period. A higher turnover ratio generally indicates better inventory management and efficient sales.
From 2019 to 2023, National Presto Industries Inc's inventory turnover has decreased from 1.84 to 1.44. This downward trend suggests that the company is taking longer to sell and replace its inventory, which may indicate excessive inventory levels, slow sales, or difficulties in managing the supply chain.
A lower inventory turnover ratio can tie up capital in excess inventory, leading to increased carrying costs and potentially reduced profitability. It may also signal inefficiencies in the company's operations or challenges in adapting to changing market demands.
National Presto Industries Inc should monitor its inventory turnover closely and take steps to improve efficiency, such as optimizing inventory levels, streamlining operations, or refining its supply chain processes to better align with customer demand and market conditions.
Peer comparison
Dec 31, 2023