Advanced Drainage Systems Inc (WMS)
Inventory turnover
| Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 1,810,004 | 1,834,267 | 1,787,841 | 1,776,715 | 1,728,524 | 1,721,785 | 1,750,517 | 1,837,220 | 1,952,713 | 2,045,533 | 2,120,663 | 2,062,831 | 1,968,931 | 1,797,565 | 1,608,825 | 1,440,741 | 1,292,698 | 1,238,119 | 1,190,545 | 1,201,596 |
| Inventory | US$ in thousands | 488,269 | 476,369 | 487,232 | 487,833 | 464,200 | 405,409 | 385,090 | 434,631 | 463,994 | 459,029 | 479,171 | 489,492 | 494,324 | 465,518 | 425,244 | 330,713 | 300,961 | 238,860 | 223,268 | 239,239 |
| Inventory turnover | 3.71 | 3.85 | 3.67 | 3.64 | 3.72 | 4.25 | 4.55 | 4.23 | 4.21 | 4.46 | 4.43 | 4.21 | 3.98 | 3.86 | 3.78 | 4.36 | 4.30 | 5.18 | 5.33 | 5.02 |
March 31, 2025 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,810,004K ÷ $488,269K
= 3.71
The inventory turnover ratio of Advanced Drainage Systems Inc has shown some fluctuations over the periods provided. The inventory turnover ratio measures the company's efficiency in managing its inventory, indicating how many times the company sells and replaces its inventory within a certain period.
From June 30, 2020, to March 31, 2025, there is a general declining trend in the inventory turnover ratio, suggesting potential inefficiencies in managing inventory over time. The ratio has fluctuated between a high of 5.33 on September 30, 2020, and a low of 3.64 on June 30, 2024.
A consistent downward trend in the inventory turnover ratio may indicate issues such as overstocking, slow-moving inventory, or challenges in demand forecasting. It may also point towards potential liquidity concerns if inventory is not being converted into sales efficiently.
It is important for Advanced Drainage Systems Inc to closely monitor its inventory management practices to ensure optimal efficiency in utilizing its resources. Implementing strategies to improve inventory turnover, such as better demand forecasting, efficient inventory control, and timely inventory replenishment, could help enhance the company's overall operational efficiency and financial performance.