Semtech Corporation (SMTC)

Inventory turnover

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020	Oct 27, 2019	Jul 28, 2019	Apr 28, 2019
Cost of revenue (ttm)	US$ in thousands	1,335,735	1,116,711	1,058,103	683,850	601,497	455,098	467,473	457,718	447,245	446,108	430,656	413,493	400,645	402,013	389,631	391,992	392,580	358,966	379,693	384,744
Inventory	US$ in thousands	144,992	160,586	180,231	213,234	207,704	111,083	107,628	106,901	114,003	105,159	103,031	93,919	87,494	78,367	77,548	76,933	73,010	70,108	75,060	73,480
Inventory turnover		9.21	6.95	5.87	3.21	2.90	4.10	4.34	4.28	3.92	4.24	4.18	4.40	4.58	5.13	5.02	5.10	5.38	5.12	5.06	5.24

January 28, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,335,735K ÷ $144,992K
= 9.21

Inventory turnover measures how efficiently a company is managing its inventory by showing how many times during a period it sells and replaces its inventory. A higher inventory turnover ratio indicates that the company is selling its goods quickly and efficiently, while a lower ratio may suggest inefficiencies in inventory management or slow sales.

Looking at the inventory turnover ratios for Semtech Corporation over the past few quarters, we observe fluctuations in the ratio. The ratios have ranged from 2.90 to 9.21, indicating some variability in the company's inventory management efficiency.

The trend shows an overall improvement in inventory turnover since the ratio has been gradually increasing over the periods. This indicates that Semtech has been selling its inventory at a quicker pace compared to the past, which could be a positive sign of effective inventory management.

It is important for Semtech to maintain an optimal inventory turnover ratio to avoid holding excess inventory, which can tie up capital and increase storage costs. Analyzing the trend in inventory turnover ratios over time can help in assessing the effectiveness of Semtech's inventory management strategy and identifying areas for potential improvement.