Oracle Corporation (ORCL)
Inventory turnover
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 13,550,000 | 14,674,000 | 15,418,000 | 10,884,000 | 11,167,000 |
| Inventory | US$ in thousands | 334,000 | 298,000 | 314,000 | 142,000 | 211,000 |
| Inventory turnover | 40.57 | 49.24 | 49.10 | 76.65 | 52.92 |
May 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $13,550,000K ÷ $334,000K
= 40.57
Inventory turnover is a financial ratio that measures the number of times a company's inventory is sold and replaced within a specific period. A higher inventory turnover typically indicates that a company is efficiently managing its inventory by quickly converting it into sales.
Looking at Oracle Corporation's inventory turnover over the past five years, we observe fluctuations in the ratio. In May 31, 2024, the inventory turnover was 40.57, which was lower compared to the previous year, indicating a slightly slower conversion of inventory into sales. However, it is important to note that a high inventory turnover is not always a positive sign as it could also suggest aggressive sales tactics or inadequate inventory levels.
In May 31, 2023 and May 31, 2022, Oracle Corporation had relatively high inventory turnover ratios of 49.24 and 49.10 respectively, suggesting efficient management of inventory during those years. The inventory turnover ratio decreased in May 31, 2021 to 76.65, indicating an exceptionally fast rate of inventory turnover, possibly due to increased sales or better inventory management practices during that period. Subsequently, the turnover ratio decreased to 52.92 in May 31, 2020, reflecting a slower pace of inventory turnover compared to the previous year.
Overall, Oracle Corporation's inventory turnover ratios have shown variability, with fluctuations over the years. It is essential for investors and analysts to consider the context and industry benchmarks when interpreting inventory turnover ratios to gain a more comprehensive understanding of the company's inventory management efficiency.
Peer comparison
May 31, 2024