SolarEdge Technologies Inc (SEDG)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,272,700 | 2,265,630 | 1,334,550 | 997,912 | 946,322 |
| Inventory | US$ in thousands | 1,443,450 | 729,201 | 380,143 | 331,696 | 170,798 |
| Inventory turnover | 1.57 | 3.11 | 3.51 | 3.01 | 5.54 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,272,700K ÷ $1,443,450K
= 1.57
Solaredge Technologies Inc's inventory turnover has seen fluctuations over the past five years, ranging from a high of 5.54 in 2019 to a low of 1.57 in 2023. A higher inventory turnover ratio generally indicates that the company is efficiently managing its inventory by quickly selling products and replenishing stock.
The significant drop in inventory turnover from 2022 to 2023 might suggest potential issues such as overstocking, slow-moving inventory, or lower sales volume. This could tie up working capital and lead to increased storage costs.
In contrast, the peak in inventory turnover in 2019 indicates a period of strong performance in inventory management, potentially driven by effective demand forecasting, inventory control, and sales strategies.
Overall, Solaredge Technologies Inc should continue monitoring its inventory turnover ratio to ensure optimal inventory management practices and operational efficiency.
Peer comparison
Dec 31, 2023