Advanced Drainage Systems Inc (WMS)
Inventory turnover
| Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 197,089 | 171,208 | 171,966 | 415,039 | 396,278 |
| Inventory | US$ in thousands | 464,200 | 463,994 | 494,324 | 300,961 | 282,398 |
| Inventory turnover | 0.42 | 0.37 | 0.35 | 1.38 | 1.40 |
March 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $197,089K ÷ $464,200K
= 0.42
The inventory turnover ratio for Advanced Drainage Systems Inc has shown some fluctuations over the past five years. In the most recent fiscal year ending March 31, 2024, the inventory turnover ratio stood at 0.42, which indicates that the company converted its inventory into sales approximately 0.42 times during the year. This represents a slight improvement compared to the previous year's ratio of 0.37.
However, looking back over the five-year period, it is evident that the inventory turnover ratio has generally been low, with values ranging from 0.35 to 1.40. A low inventory turnover ratio may suggest issues such as overstocking, slow-moving inventory, or inefficiencies in inventory management.
Given the trend observed in the inventory turnover ratio, Advanced Drainage Systems Inc may benefit from implementing strategies to streamline its inventory management processes, such as optimizing stocking levels, improving demand forecasting, or enhancing supply chain efficiency. Further analysis of the company's operations and industry benchmarks may provide valuable insights into how to effectively manage inventory turnover and improve overall performance.