Penguin Solutions, Inc. (PENG)

Inventory turnover

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Cost of revenue	US$ in thousands	827,884	1,026,080	1,004,830	817,556	905,981
Inventory	US$ in thousands	151,213	174,977	263,768	363,601	162,991
Inventory turnover		5.47	5.86	3.81	2.25	5.56

August 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $827,884K ÷ $151,213K
= 5.47

The inventory turnover ratios for Penguin Solutions, Inc. over the analyzed period reflect notable fluctuations, indicative of the company's evolving inventory management efficiency.

As of August 31, 2020, the inventory turnover stood at 5.56, suggesting a relatively high rate of inventory sales and replenishment. This ratio decreased significantly by August 31, 2021, to 2.25, indicating a substantial slowdown in inventory movement, which could suggest overstocking, reduced sales efficiency, or potential issues with product demand. In the following year, August 31, 2022, the ratio improved to 3.81, signaling a recovery in inventory turnover rates, possibly due to better sales performance or improved inventory management practices.

The ratio further increased sharply by August 31, 2023, reaching 5.86, surpassing the earlier 2020 level, and indicating an increase in sales velocity relative to inventory levels. This suggests enhanced inventory turnover efficiency, potentially reflecting effective sales strategies or supply chain improvements. However, the ratio slightly declined to 5.47 by August 31, 2024, indicating a modest slowdown in inventory sales relative to the previous year but still remaining above the 2020 levels.

Overall, the trend illustrates a period of inventory management challenges and recovery, culminating in a high turnover ratio during the 2023 fiscal year. The fluctuations underscore the importance of continuous inventory management practices to maintain optimal turnover rates aligned with sales performance and market conditions.