SolarEdge Technologies Inc (SEDG)

Inventory turnover

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Cost of revenue (ttm)	US$ in thousands	1,461,917	1,859,528	2,272,705	2,529,891	2,562,125	2,433,272	2,265,631	2,027,400	1,766,521	1,545,254	1,334,547	1,190,905	1,067,094	972,117	997,912	1,025,104	1,066,319	1,051,771	946,322	514,012
Inventory	US$ in thousands	1,505,100	1,549,120	1,443,450	1,177,800	984,194	874,212	729,201	561,352	470,272	432,504	380,143	304,713	321,915	340,038	331,696	297,027	264,460	198,557	170,798	134,283
Inventory turnover		0.97	1.20	1.57	2.15	2.60	2.78	3.11	3.61	3.76	3.57	3.51	3.91	3.31	2.86	3.01	3.45	4.03	5.30	5.54	3.83

June 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,461,917K ÷ $1,505,100K
= 0.97

Inventory turnover is a crucial efficiency ratio that indicates how many times a company's inventory is sold and replaced over a specific period. SolarEdge Technologies Inc's inventory turnover has displayed fluctuations over the past several quarters.

The trend shows a general decrease from the end of 2019 to the middle of 2021 before gradually increasing again. This could suggest changes in the company's sales patterns or inventory management strategies during this period.

The company's inventory turnover ratio has ranged from a low of 0.97 to a high of 5.54 over the past two years, indicating varying levels of efficiency in managing inventory levels and sales performance.

An inventory turnover ratio below 1, such as in June 2024, indicates that the company is holding onto inventory for a longer period before selling it, which could lead to potential issues like obsolete or excess inventory.

On the other hand, a higher inventory turnover ratio, like the peak of 5.54 in September 2019, suggests that the company is selling its inventory more quickly, which can free up cash flow and reduce storage costs.

Overall, SolarEdge Technologies Inc's inventory turnover ratio fluctuates, and it is essential for the company to monitor and optimize its inventory management practices to ensure efficiency and profitability in its operations.