The year-on-year inventory growth rate reflects the change in the inventory level at the end of the current reporting period compared with the inventory level of the same period last year. This indicator can reveal the efficiency of production, sales and inventory management of an enterprise over a certain period of time. A low year-on-year inventory growth rate is generally considered a positive signal, which may indicate that the company has good sales, efficient inventory management, or is sensitive to market demand. Conversely, a high year-on-year inventory growth rate may mean that the product is unsalable, inventory pressure is high, or the market demand is misjudged. Investors can identify companies that may have operational risks or discover companies with higher operational efficiency by analyzing the year-on-year inventory growth rate.