Qualcomm Incorporated (QCOM)

Inventory turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	15,869,000	18,635,000	14,262,000	9,255,000	8,599,000
Inventory	US$ in thousands	6,422,000	6,341,000	3,228,000	2,598,000	1,400,000
Inventory turnover		2.47	2.94	4.42	3.56	6.14

September 30, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $15,869,000K ÷ $6,422,000K
= 2.47

Qualcomm Incorporated's inventory turnover has shown a decreasing trend over the last five years. The inventory turnover ratio measures the efficiency with which the company manages its inventory by indicating how many times the inventory is sold and replaced within a specific period. A higher inventory turnover ratio is generally considered favorable as it signifies that inventory is being managed efficiently.

In this case, Qualcomm's inventory turnover ratio has declined from 6.14 in 2019 to 2.47 in 2023. The decreasing trend may suggest that Qualcomm is taking longer to sell and replace its inventory, which could indicate potential issues with inventory management and sales performance.

It is important for Qualcomm to closely monitor its inventory turnover ratio and investigate the reasons behind the decline. Factors such as inefficient inventory management, overstocking, declining sales, or changing market demand could all contribute to a decreasing inventory turnover ratio.

Overall, Qualcomm should focus on optimizing its inventory control processes to improve its inventory turnover ratio and enhance its overall operational efficiency.