Teradyne Inc (TER)

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	1,172,950	1,158,885	1,157,188	1,132,714	1,135,797	1,155,652	1,198,259	1,250,819	1,287,895	1,334,506	1,372,312	1,476,674	1,496,225	1,447,406	1,428,462	1,356,911	1,335,728	1,297,961	1,174,405	1,047,477
Inventory	US$ in thousands	298,492	297,340	762,194	314,232	309,974	879,001	347,295	352,058	325,019	310,754	295,625	259,341	243,330	224,242	226,138	262,474	222,189	191,317	206,088	182,978
Inventory turnover		3.93	3.90	1.52	3.60	3.66	1.31	3.45	3.55	3.96	4.29	4.64	5.69	6.15	6.45	6.32	5.17	6.01	6.78	5.70	5.72

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,172,950K ÷ $298,492K
= 3.93

The inventory turnover ratio for Teradyne Inc has fluctuated over the past few years. It was relatively stable around the range of 5 to 6 from March 2020 to June 2021, indicating that the company was effectively managing its inventory by efficiently selling and replacing its inventory within a reasonable timeframe.

However, starting from March 2022, the inventory turnover ratio began to decrease significantly, dropping to as low as 1.31 by September 2023. This decline suggests that Teradyne Inc may have been facing challenges in selling its inventory or possibly accumulating excess inventory levels.

Although there was a slight improvement in the inventory turnover ratio towards the end of 2024, reaching 3.93 by December, it still remained below the earlier levels achieved by the company. This indicates that Teradyne Inc may need to focus on optimizing its inventory management practices to improve efficiency in turning over its inventory and maintaining healthy liquidity levels.

Overall, the declining trend in the inventory turnover ratio for Teradyne Inc raises concerns about potential inventory management issues that may impact the company's cash flow and profitability in the future.