Varex Imaging Corp (VREX)
Inventory turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 603,100 | 575,900 | 546,600 | 548,100 | 523,900 |
| Inventory | US$ in thousands | 277,500 | 303,200 | 224,800 | 271,900 | 248,200 |
| Inventory turnover | 2.17 | 1.90 | 2.43 | 2.02 | 2.11 |
September 30, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $603,100K ÷ $277,500K
= 2.17
Varex Imaging Corp's inventory turnover has fluctuated over the past five years, ranging from a low of 1.90 in 2022 to a high of 2.43 in 2021. This ratio indicates how efficiently the company is managing its inventory by measuring how many times inventory is sold and replaced within a given period.
The upward trend in inventory turnover from 2020 to 2021 suggests improved efficiency in inventory management, potentially resulting from better demand forecasting or tighter inventory control. However, the decrease in 2022 followed by a slight increase in 2023 may indicate challenges in maintaining optimal inventory levels or potential changes in the company's sales patterns.
While a higher inventory turnover ratio generally indicates better liquidity and efficient use of resources, a significant increase in the ratio could also suggest inventory shortages that may lead to stockouts and lost sales opportunities. Similarly, a declining ratio could point to excess inventory levels that tie up capital and increase holding costs.
Overall, a comprehensive analysis of Varex Imaging Corp's inventory turnover trend alongside other financial metrics and industry benchmarks would provide valuable insights into the company's operational efficiency and performance.
Peer comparison
Sep 30, 2023