NXP Semiconductors NV (NXPI)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 5,495,000 | 5,723,000 | 5,688,000 | 4,996,000 | 4,377,000 |
| Inventory | US$ in thousands | 2,356,000 | 2,134,000 | 1,782,000 | 1,189,000 | 1,030,000 |
| Inventory turnover | 2.33 | 2.68 | 3.19 | 4.20 | 4.25 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $5,495,000K ÷ $2,356,000K
= 2.33
The inventory turnover ratio of NXP Semiconductors NV has exhibited a declining trend over the past five years. In December 2020, the ratio stood at 4.25, indicating that the company turned over its inventory approximately 4.25 times during that year. However, by the end of December 2024, the inventory turnover had decreased to 2.33, suggesting a reduction in the efficiency of managing and selling inventory.
A decreasing inventory turnover ratio could imply potential issues such as overstocking, slow-moving inventory, or declining sales. This trend raises concerns about the company's inventory management practices and its ability to convert inventory into sales in a timely manner.
It is essential for NXP Semiconductors NV to address the factors leading to the decreasing inventory turnover to enhance operational efficiency, optimize inventory levels, and improve overall financial performance. Monitoring and improving inventory turnover can help the company enhance liquidity, reduce carrying costs, and maximize profitability.
Peer comparison
Dec 31, 2024