Sitime Corporation (SITM)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	61,905	100,643	79,346	58,224	44,516
Inventory	US$ in thousands	65,539	57,650	23,630	12,350	11,911
Inventory turnover		0.94	1.75	3.36	4.71	3.74

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $61,905K ÷ $65,539K
= 0.94

SiTime Corp's inventory turnover has seen a declining trend over the past five years. The inventory turnover ratio decreased from 3.74 in 2019 to 0.94 in 2023, reflecting that the company is holding inventory for a longer period before selling it. A lower inventory turnover may indicate inefficient inventory management, excess stock, or slowing sales.

The sharp decline in the inventory turnover ratio suggests that SiTime Corp may have experienced challenges in optimizing its inventory levels in recent years. It is crucial for the company to address this issue to improve efficiency, reduce carrying costs, and maximize liquidity. Management should closely monitor inventory levels, demand forecasts, and supply chain processes to enhance inventory turnover and overall operational performance.