UFP Technologies Inc (UFPT)

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	564,202	397,355	361,693	352,395	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
Inventory	US$ in thousands	87,536	88,690	77,976	73,900	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
Inventory turnover		6.45	4.48	4.64	4.77	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

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $564,202K ÷ $87,536K
= 6.45

UFP Technologies Inc's inventory turnover ratio has been relatively stable over the past few years, though there have been some fluctuations in the values. The inventory turnover ratio indicates how many times a company sells and replaces its inventory during a specific period.

From March 31, 2020, to December 31, 2021, the company maintained a fairly consistent inventory turnover ratio ranging between 8.41 and 9.07, suggesting that the company was efficiently managing its inventory during this period.

However, starting from March 31, 2022, there was a noticeable decline in the inventory turnover ratio, dropping to 4.95, and further declining to 4.48 by September 30, 2024. This decline indicates that the company was not selling and replacing its inventory as quickly as before, which could lead to higher carrying costs and potentially obsolete inventory.

The increase in the inventory turnover ratio to 6.45 by December 31, 2024 may suggest a possible improvement in inventory management efficiency. It is important for UFP Technologies Inc to closely monitor and optimize its inventory levels to ensure a balance between having enough stock to meet customer demand while not tying up excess capital in unsold inventory.