ON Semiconductor Corporation (ON)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	3,866,200	4,369,500	4,249,000	4,025,500	3,539,200
Inventory	US$ in thousands	2,242,000	2,111,800	1,616,800	1,379,500	1,251,400
Inventory turnover		1.72	2.07	2.63	2.92	2.83

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $3,866,200K ÷ $2,242,000K
= 1.72

ON Semiconductor Corporation's inventory turnover has fluctuated over the past five years. In December 31, 2020, the inventory turnover was 2.83, which indicates that the company was able to sell and replace its inventory approximately 2.83 times during that year.

By December 31, 2021, the inventory turnover improved slightly to 2.92, showing a positive trend in efficiently managing inventory. However, in December 31, 2022, there was a decrease in inventory turnover to 2.63, suggesting a potential slowing down in inventory management efficiency.

In December 31, 2023, the inventory turnover dropped further to 2.07, indicating a significant decrease in the rate at which inventory was turning over. This could potentially be a concern as lower inventory turnover may lead to increased holding costs and reduced liquidity.

Finally, by December 31, 2024, the inventory turnover decreased to 1.72, the lowest in the five-year period. This suggests that the company may have excess inventory on hand or facing challenges in selling its products efficiently.

Overall, a declining trend in inventory turnover may indicate inefficiencies in inventory management, which could impact the company's profitability and cash flow. Monitoring and improving inventory turnover is crucial for ON Semiconductor Corporation to optimize its operations and financial performance.