Rambus Inc (RMBS)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	110,107	103,422	107,579	70,394	60,748
Inventory	US$ in thousands	44,634	36,154	20,900	8,482	14,466
Inventory turnover		2.47	2.86	5.15	8.30	4.20

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $110,107K ÷ $44,634K
= 2.47

The inventory turnover ratio for Rambus Inc has exhibited some fluctuations over the past five years, as per the provided data. In 2020, the company had an inventory turnover of 4.20 times, indicating that the inventory was sold and replaced approximately 4.20 times during that year.

The ratio significantly improved in 2021 to 8.30 times, suggesting that Rambus managed its inventory more efficiently, with a higher rate of turnover. This implies the company sold and replaced its inventory more than twice as much as in the previous year.

However, in 2022, the inventory turnover ratio decreased to 5.15 times, which could indicate a slight slowdown in inventory management efficiency compared to the previous year. Further, in 2023 and 2024, the inventory turnover ratios dropped to 2.86 and 2.47 times, respectively. These declining trends might be a cause for concern, as lower turnover ratios could suggest issues such as overstocking, poor sales, or ineffective inventory management.

Overall, Rambus Inc should closely monitor its inventory turnover ratios to ensure optimal management of inventory levels and improve operational efficiency in the coming financial periods.