The difference between the revenue growth rate and the inventory growth rate
factor.formula
Among them, Sales_Growth_Q represents the year-on-year growth rate of operating income in the most recent quarter, and Inventory_Growth_Q represents the year-on-year growth rate of inventory in the same quarter.
The formula calculates the difference between the operating income growth rate and the inventory growth rate in the most recent quarter. This difference can help us understand whether the company's revenue growth is accompanied by an equal proportion of inventory backlog. If the difference is large, it may mean that the company's product demand is strong and its sales ability is strong; if the difference is small or even negative, it may mean that the company's sales are weak or the risk of inventory backlog is high.
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The year-over-year growth rate of operating income for the most recent quarter is calculated as (current quarter's operating income - same period last year's operating income) / same period last year's operating income.
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The year-on-year growth rate of inventory in a single quarter during the same period is calculated as (inventory in this quarter - inventory in the same period last year) / inventory in the same period last year.
factor.explanation
This factor is designed to measure the balance between a company's sales growth and inventory changes. A significantly positive difference may indicate that the company's product sales are strong and that inventory can be effectively consumed. It may also suggest that the company's management is optimistic about future sales prospects. On the contrary, a small or negative difference may indicate weak sales, inventory backlogs, and possible risk of price cuts or price reductions. In addition, the trend changes of this factor are also worth paying attention to. For example, a continuous decline in the difference may indicate potential operating risks or changes in market demand. This factor can be used as an auxiliary indicator to evaluate the company's operating efficiency and predict future sales performance.