Silicon Laboratories Inc (SLAB)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	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
Cost of revenue (ttm)	US$ in thousands	272,198	239,091	247,744	280,051	321,672	378,781	398,278	396,434	381,549	362,370	333,460	307,407	295,468	276,513	258,438	233,015	252,623	143,197	175,154	207,043
Inventory	US$ in thousands	105,639	139,489	166,079	198,206	194,295	167,581	145,523	133,236	100,417	88,447	74,026	55,515	49,307	59,114	52,269	79,244	47,861	66,159	70,022	68,160
Inventory turnover		2.58	1.71	1.49	1.41	1.66	2.26	2.74	2.98	3.80	4.10	4.50	5.54	5.99	4.68	4.94	2.94	5.28	2.16	2.50	3.04

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $272,198K ÷ $105,639K
= 2.58

Inventory turnover is a key financial ratio that measures the efficiency of a company in managing its inventory. It indicates how many times a company's inventory is sold and replaced over a specific period. The higher the inventory turnover, the more efficiently the company is managing its inventory.

Analyzing the inventory turnover of Silicon Laboratories Inc over the reported periods shows fluctuations in the ratio. In March 2020, the inventory turnover was 3.04, indicating that the company turned over its inventory approximately three times during that period. The ratio decreased to 2.50 by June 2020 and further declined to 2.16 by September 2020.

However, starting from December 2020, the trend reversed, and the inventory turnover significantly improved. The ratio increased to 5.28 by the end of December 2020, suggesting that the company was able to sell and replace its inventory more than five times in that period. This upward trend continued through the following quarters, with inventory turnover reaching its peak at 5.99 by December 2021.

Subsequently, there was a slight decline in the inventory turnover ratio, but it remained relatively high compared to the earlier periods. As of December 2024, the inventory turnover ratio stood at 2.58, indicating a moderate level of inventory turnover compared to the peak period.

Overall, the inventory turnover ratio of Silicon Laboratories Inc has shown fluctuations over the reported periods, with significant improvements in efficiency in managing inventory from December 2020 to December 2021. It is essential for the company to maintain optimal inventory turnover to ensure effective utilization of resources and profitability.