Somnigroup International Inc. (SGI)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,796,700 | 2,871,600 | 2,772,100 | 2,038,500 | 1,763,800 |
| Inventory | US$ in thousands | 483,100 | 555,000 | 463,900 | 312,100 | 260,500 |
| Inventory turnover | 5.79 | 5.17 | 5.98 | 6.53 | 6.77 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,796,700K ÷ $483,100K
= 5.79
The inventory turnover ratio of Somnigroup International Inc. has shown a gradual decline over the past five years. In 2019, the company's inventory turnover stood at 6.77, indicating that the inventory was being sold and replaced approximately 6.77 times during the year. However, this ratio decreased to 6.53 in 2020 and further to 5.98 in 2021, suggesting a slower rate of inventory turnover.
By the end of 2022, the inventory turnover ratio had dropped to 5.17, signaling a significant decrease in the efficiency of inventory management. Although there was a slight improvement in 2023 with a ratio of 5.79, it remained below the levels recorded in the earlier years.
The declining trend in inventory turnover could imply issues such as overstocking, obsolete inventory, or challenges in maintaining optimal inventory levels. It is essential for the company to address these issues to improve operational efficiency and cash flow management. Further analysis of inventory management practices and market demand dynamics may be warranted to enhance profitability and liquidity in the future.
Peer comparison
Dec 31, 2023