American Airlines Group (AAL)

Inventory turnover

		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	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	35,852,000	35,971,000	36,075,000	35,419,000	34,971,000	34,869,000	34,956,000	35,822,000	34,909,000	33,577,000	31,123,000	28,094,000	25,897,000	22,892,000	21,215,000	18,911,000	20,614,000	16,253,000	18,408,000	21,509,000
Inventory	US$ in thousands	2,638,000	2,582,000	2,575,000	2,500,000	2,400,000	2,461,000	2,280,000	2,308,000	2,279,000	2,215,000	2,273,000	2,002,000	1,795,000	1,851,000	1,789,000	1,658,000	1,614,000	1,633,000	1,653,000	1,772,000
Inventory turnover		13.59	13.93	14.01	14.17	14.57	14.17	15.33	15.52	15.32	15.16	13.69	14.03	14.43	12.37	11.86	11.41	12.77	9.95	11.14	12.14

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $35,852,000K ÷ $2,638,000K
= 13.59

Inventory turnover is a key financial ratio that measures the efficiency with which a company manages its inventory. It is calculated by dividing the cost of goods sold by the average inventory level. A higher inventory turnover ratio indicates that a company is selling its inventory quickly and efficiently.

In the case of American Airlines Group, the inventory turnover ratio has shown a generally increasing trend over the past few years. It stood at 12.14 on March 31, 2020, and gradually increased to 15.52 by March 31, 2023, before slightly decreasing to 14.57 by December 31, 2023.

During the most recent periods, the inventory turnover ratio has ranged between 13.59 and 15.33. This indicates that American Airlines Group is effectively managing its inventory levels, selling its goods more frequently, and potentially reducing holding costs associated with excessive inventory.

A rising inventory turnover ratio can suggest that the company is efficiently utilizing its resources and may be experiencing strong demand for its products or services. However, a very high inventory turnover ratio could also imply potential challenges in matching supply with demand or stockouts.

Overall, the inventory turnover ratio can provide insights into how effectively American Airlines Group is managing its inventory to meet market demands and generate revenue. Further analysis of industry benchmarks and trends would provide additional context for evaluating the company's inventory management performance.