Automatic Data Processing Inc (ADP)

Inventory turnover

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Cost of revenue	US$ in thousands	14,783,300	14,005,400	13,171,500	12,152,800	8,445,200
Inventory	US$ in thousands	—	0	49,569,200	34,905,800	26,708,100
Inventory turnover		—	—	0.27	0.35	0.32

June 30, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $14,783,300K ÷ $—K
= —

The inventory turnover for Automatic Data Processing Inc has been gradually declining over the past three years, indicating that the company is taking longer to sell its inventory. In particular, the inventory turnover ratios for the years 2020, 2021, and 2022 were 0.32, 0.35, and 0.27, respectively. This trend suggests potential issues such as overstocking, obsolete inventory, or slowing sales. It is essential for the company to closely monitor its inventory management to improve efficiency and liquidity. Monitoring inventory turnover ratios can help the company better manage its inventory levels and optimize working capital.