Advance Auto Parts Inc (AAP)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 11,202,700 | 10,471,600 | 10,190,400 | 9,388,210 | 9,065,820 |
| Inventory | US$ in thousands | 4,857,700 | 4,896,270 | 4,659,020 | 4,538,200 | 4,432,170 |
| Inventory turnover | 2.31 | 2.14 | 2.19 | 2.07 | 2.05 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $11,202,700K ÷ $4,857,700K
= 2.31
The inventory turnover for Advance Auto Parts Inc has shown a consistent increase over the past five years. The ratio has steadily improved from 2.05 in 2019 to 2.31 in 2023, indicating that the company is managing its inventory more efficiently. This implies that Advance Auto Parts Inc is selling its inventory at a faster rate relative to the amount of inventory it holds, which is a positive trend for the company's operations. A higher inventory turnover ratio generally suggests effective inventory management, reduced carrying costs, and potentially higher sales and profitability. It is worth noting that achieving an optimal level of inventory turnover is crucial for companies in the retail sector like Advance Auto Parts Inc to maintain a balance between stocking enough inventory to meet customer demand and avoiding excessive holding costs.
Peer comparison
Dec 31, 2023