UFP Technologies Inc (UFPT)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	345,706	337,364	335,242	334,990	317,726	291,553	253,155	214,499	192,207	180,486	174,381	169,272	169,175	172,542	176,236	181,703	180,572	182,061	180,723	179,365
Inventory	US$ in thousands	70,191	69,777	63,049	56,649	53,536	53,821	50,556	43,295	33,436	21,674	21,160	20,016	18,642	19,488	20,959	20,242	18,276	19,219	19,038	19,437
Inventory turnover		4.93	4.83	5.32	5.91	5.93	5.42	5.01	4.95	5.75	8.33	8.24	8.46	9.07	8.85	8.41	8.98	9.88	9.47	9.49	9.23

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $345,706K ÷ $70,191K
= 4.93

The inventory turnover ratio of UFP Technologies Inc has shown fluctuation over the past few quarters, ranging from a low of 4.83 to a high of 9.88. Generally, a higher inventory turnover ratio indicates that the company is efficiently managing its inventory by selling goods quickly and replenishing stock effectively.

In the recent quarters, the inventory turnover has been relatively stable, ranging from 4.93 to 5.93. This may indicate that the company has been able to maintain a consistent level of sales in relation to its inventory levels during this period.

The significant increase in inventory turnover in the third and fourth quarters of 2021, with ratios exceeding 8, suggests a substantial improvement in the company's inventory management efficiency during that period. This could have been driven by factors such as effective inventory control, demand forecasting, or improved sales strategies.

It is important for UFP Technologies Inc to continue monitoring its inventory turnover ratio to ensure optimal inventory management practices. Consistently analyzing and improving this ratio can help the company optimize its working capital, reduce carrying costs, and enhance overall operational efficiency.