Asbury Automotive Group Inc (ABG)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	12,046,900	12,333,300	7,935,500	5,908,400	6,041,400
Inventory	US$ in thousands	1,768,300	959,200	718,400	875,200	985,000
Inventory turnover		6.81	12.86	11.05	6.75	6.13

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $12,046,900K ÷ $1,768,300K
= 6.81

Asbury Automotive Group Inc's inventory turnover ratio has fluctuated over the past five years. In 2023, the company's inventory turnover was 6.81, indicating that it turned over its inventory approximately 6.81 times during the year. This represents a decrease from the higher levels seen in 2022 and 2021, where the ratios were 12.86 and 11.05 respectively.

The lower inventory turnover in 2023 could suggest that Asbury Automotive Group Inc may be carrying more inventory relative to its sales volume compared to the previous years, which may tie up more capital and impact the company's liquidity. It is important for the company to monitor and manage its inventory efficiently to prevent excess holding costs and potential obsolescence.

Furthermore, a comparison with industry peers or historical trends can provide additional insights into the effectiveness of Asbury Automotive Group Inc's inventory management practices. A lower inventory turnover ratio may prompt further investigation into inventory levels, procurement strategies, and overall operational efficiency.