Inventory t urnover for h igh -g rowth c ompanies In the appealing chaos of a rapidly growing business, regular financial reporting can sometimes go by the wayside, which is a big mistake. Stock quotes provided by InterActive Data. And while previously Dell was the front-runner of a build-to-order model, Apple is currently clearly the market leader when it comes to the way it runs inventory. A higher figure shows that the company's inventory is being managed properly. Receivables turnover An activity ratio equal to revenue divided by receivables. Lewis: One of the other ones that immediately comes to mind for me is just intellectual property risk, too.
Niu: Yeah, I definitely agree there. Inventory turnover can be thought of like this : How many times have we changed inventory during the course of the year? Average Receivable Collection Period Sep 29, 2018 Jun 30, 2018 Mar 31, 2018 Dec 30, 2017 Sep 30, 2017 Jul 1, 2017 Apr 1, 2017 Dec 31, 2016 Sep 24, 2016 Jun 25, 2016 Mar 26, 2016 Dec 26, 2015 Sep 26, 2015 Jun 27, 2015 Mar 28, 2015 Dec 27, 2014 Sep 27, 2014 Jun 28, 2014 Mar 29, 2014 Dec 28, 2013 Sep 28, 2013 Jun 29, 2013 Mar 30, 2013 Dec 29, 2012 Selected Financial Data Receivables turnover 11. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. These are not situations you want for your business. That's part of why a , ranked Apple's supply chain the best in the world.
They build it and they ship it directly to you. Within Technology sector 19 other companies have achieved higher inventory turnover ratio. Apple Inc's Inventory to Revenue for the quarter that ended in Sep. The company may have overestimated demand for their products and purchased too many goods as shown by low turnover. In it, you'll find the name of a relatively small chip maker that's powering the revolution from inside the gadgets. Low turnover implies weak sales and possibly excess inventory, also known as overstocking. In general, a higher number is better because it indicates greater efficiency with moving the company's product, which minimizes the risk that it will lose value and need to be written down.
This is a company that sells hundreds of millions of hardware gadgets all over the world and yet it doesn't actually need to stockpile its goods. Yet there is also risk in having too high an inventory turnover rate. In year 2 the company has reduced this value to to 29,4, indicating that a company has been intensifying its sales. Within Technology sector 19 other companies have achieved higher inventory turnover ratio. This would reduce the expenses or increase the company's income if the money is invested in the firm's activity intensification. Q4 2018 Calculations Ratio Description The company Average receivable collection period An activity ratio equal to the number of days in the period divided by receivables turnover.
All quotes are in local exchange time. I mean, Apple does very little hands on. The Motley Fool owns shares of Apple. Inventory turnover ratio for both decreased in 2013 and then increased again in 2014. Apple is one of the larger players ushering in the mobile revolution, but there are plenty of ways to play it.
Posts: 14605; Member since: 19 Dec 2008 we also call that false demand by being out of stock. Another way to reduce inventory hold times is by improving efficiency for inbound transportation. But when doing a complete analysis of a company, it can shed a lot of light on the company's efficiency and how it compares to its peers. There are two metrics that I'll focus on: inventory turnover and days of inventory. . Everyone wants a piece of it and wants to know.
Apple's number is 74, according to Gartner. Lewis: To your point, while I was researching this show, I came across this stat that the flip to contract manufacturing took the amount of time that inventory sat on Apple's balance sheet from months to days. Low inventory turnover means that average inventory is a higher percent of sales. The speed at which a company can sell inventory is a critical measure of business performance. Analysis Inventory turnover is a measure of how efficiently a company can control its merchandise, so it is important to have a high turn.
Posts: 14605; Member since: 19 Dec 2008 Amazingly, false demand makes people want it more, which makes sales go up. It is very useful in conducting a trend analysis. Sales have to match inventory purchases otherwise the inventory will not turn effectively. Apple Inc's for the quarter that ended in Sep. Under no circumstances does any information posted on GuruFocus. It indicates how many days the firm averagely needs to turn its inventory into sales.
They need to sell inventory, collect revenue, and then pay their vendors to avoid cash-flow shortages. An example of the changes made was Cook's decision to shut down 10 of the 19 company warehouses to limit overstocking, a move that brought inventory down from a month to only six days. This means under the first approach, inventory turns 40 times a year and is on hand approximately nine days. The Importance of Inventory Turnover How important is inventory turnover? Data for this Date Range Sept. Fundamental company data provided by Morningstar, updated daily. It will help your inventory flow smoothly through your supply chain, keeping your customers happy and increasing your margins.