Sanmina Corporation (SANM)

Inventory turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cost of revenue	US$ in thousands	7,194,090	8,452,910	7,268,270	6,230,200	6,434,660
Inventory	US$ in thousands	1,443,630	1,477,220	1,684,100	1,041,790	861,281
Inventory turnover		4.98	5.72	4.32	5.98	7.47

September 30, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $7,194,090K ÷ $1,443,630K
= 4.98

The analysis of Sanmina Corporation's inventory turnover over the past five years reveals a fluctuating trend. The inventory turnover ratio, which indicates how efficiently the company manages its inventory by measuring how many times inventory is sold and replaced within a given period, has ranged from a low of 4.32 in 2022 to a high of 7.47 in 2020.

In 2020, the inventory turnover ratio was at its peak at 7.47, indicating that the company efficiently converted its inventory into sales multiple times throughout the year. However, there was a notable decline in efficiency in managing inventory in 2022, with the ratio dropping to 4.32, suggesting that inventory turnover decreased compared to the previous year.

In the most recent year, 2024, the inventory turnover ratio improved to 4.98, yet it remains below the levels seen in 2020 and 2021. This suggests that Sanmina Corporation could be working towards optimizing its inventory management practices to enhance efficiency in converting inventory into sales.

Overall, while there have been fluctuations in inventory turnover over the years, it is essential for Sanmina Corporation to focus on maintaining a balance between holding adequate inventory levels to meet customer demand and avoiding excess inventory that could lead to carrying costs and potential obsolescence.