Photronics Inc (PLAB)

Inventory turnover

		Oct 31, 2024	Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020
Cost of revenue	US$ in thousands	632,082	628,604	597,601	558,970	533,262
Inventory	US$ in thousands	56,527	49,963	50,753	55,249	57,269
Inventory turnover		11.18	12.58	11.77	10.12	9.31

October 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $632,082K ÷ $56,527K
= 11.18

The inventory turnover of Photronics Inc has shown a fluctuating trend over the past five years. For the most recent fiscal year ending October 31, 2024, the inventory turnover ratio was 11.18, indicating that the company's inventory was sold and replaced approximately 11.18 times during the year. This represents a decrease from the previous year when the ratio was 12.58.

Despite the decline in inventory turnover in the latest year, the company has generally maintained a healthy turnover rate above 10 in recent years. A higher inventory turnover ratio typically suggests that the company is efficiently managing its inventory levels and selling goods quickly, which can lead to lower holding costs and better cash flow.

It is essential for Photronics Inc to continue monitoring its inventory turnover and ensuring that they strike a balance between maintaining sufficient inventory levels to meet customer demand while avoiding excess stock that could tie up working capital. Analyzing the reasons behind the fluctuations in inventory turnover can provide insights into the company's operational efficiency and help identify areas for improvement.