Amazon.com Inc (AMZN)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	387,831,000	372,084,000	341,030,000	281,892,000	211,276,000
Inventory	US$ in thousands	33,318,000	34,405,000	32,640,000	23,795,000	20,497,000
Inventory turnover		11.64	10.81	10.45	11.85	10.31

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $387,831,000K ÷ $33,318,000K
= 11.64

Amazon.com Inc. has shown a consistent performance in managing its inventory turnover ratios over the past five years. Inventory turnover indicates how efficiently the company manages its inventory levels to generate sales.

The inventory turnover ratio has generally improved from 8.08 in 2019 to 9.15 in 2023, reflecting the company's ability to sell its inventory at a faster pace. A higher inventory turnover ratio is generally considered favorable as it suggests that Amazon is efficiently managing its inventory. This can lead to reduced carrying costs and lower risks of inventory obsolescence.

Although there was a slight dip in 2022 with a ratio of 8.40, which might indicate a temporary slowdown in sales relative to the inventory level, the overall trend indicates a positive performance in terms of inventory management.

The consistently high inventory turnover ratios over the years portray Amazon's effectiveness in efficiently managing its supply chain and inventory levels to meet customer demand promptly. This efficiency can lead to improved liquidity, profitability, and competitiveness in the e-commerce industry.