AAON Inc (AAON)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 971,282 | 779,971 | 474,130 | 431,020 | 409,619 |
| Inventory | US$ in thousands | 213,532 | 198,939 | 130,270 | 82,219 | 73,601 |
| Inventory turnover | 4.55 | 3.92 | 3.64 | 5.24 | 5.57 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $971,282K ÷ $213,532K
= 4.55
Inventory turnover is a key efficiency ratio that measures how many times a company's inventory is sold and replaced over a specific period. For AAON Inc., the inventory turnover has fluctuated over the past five years, indicating varying levels of efficiency in managing its inventory. In 2023, the inventory turnover ratio was 3.60, which represents an improvement from the previous year. This means that AAON Inc. sold and replaced its inventory approximately 3.60 times during the year.
The trend from 2020 to 2023 shows a decline in inventory turnover, which could be concerning as it indicates a longer period for inventory to be sold and replaced. It is essential for AAON Inc. to closely monitor and manage its inventory levels to optimize its operations and cash flow. However, it is noteworthy that AAON Inc. has historically maintained inventory turnover ratios above 3, suggesting a relatively efficient inventory management compared to industry averages.
Overall, AAON Inc. should focus on strategies to improve its inventory turnover to ensure optimal utilization of resources and enhance its financial performance in the future.
Peer comparison
Dec 31, 2023