Advanced Drainage Systems Inc (WMS)
Inventory turnover
| Mar 31, 2025 | Mar 31, 2024 | Mar 31, 2023 | Mar 31, 2022 | Mar 31, 2021 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,810,000 | 1,728,520 | 1,952,710 | 1,968,930 | 1,292,700 |
| Inventory | US$ in thousands | 488,269 | 464,200 | 463,994 | 494,324 | 300,961 |
| Inventory turnover | 3.71 | 3.72 | 4.21 | 3.98 | 4.30 |
March 31, 2025 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,810,000K ÷ $488,269K
= 3.71
Based on the provided data, Advanced Drainage Systems Inc's inventory turnover has been fluctuating over the past five years. The inventory turnover ratio indicates how efficiently the company is managing its inventory levels by showing how many times a company's inventory is sold and replaced over a period.
In March 2021, the inventory turnover ratio was 4.30, which means the company sold and replaced its inventory 4.30 times during that year. The ratio decreased slightly to 3.98 in March 2022, indicating a potential slowdown in inventory turnover efficiency. However, the ratio increased to 4.21 in March 2023, showing improved efficiency in managing inventory levels.
Subsequently, there was a decrease in the inventory turnover ratio to 3.72 in March 2024 and a further decline to 3.71 in March 2025. These decreases suggest a possible extended period for inventory to be sold and replenished, which could impact working capital and liquidity.
Overall, Advanced Drainage Systems Inc should continue monitoring its inventory turnover ratio to ensure optimal inventory management efficiency and minimize the risk of excess inventory or stockouts. A lower ratio may indicate inefficiencies in inventory management, while a higher ratio could suggest aggressive sales strategies or potential inventory shortages.