The Andersons Inc (ANDE)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 14,004,700 | 16,641,200 | 12,019,400 | 7,698,420 | 7,542,490 |
| Inventory | US$ in thousands | 1,166,700 | 1,731,720 | 1,814,540 | 1,293,070 | 1,170,540 |
| Inventory turnover | 12.00 | 9.61 | 6.62 | 5.95 | 6.44 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $14,004,700K ÷ $1,166,700K
= 12.00
Andersons Inc.'s inventory turnover has shown a positive trend over the past five years, indicating an improvement in the management of inventory. The inventory turnover ratio has increased from 6.54 in 2019 to 12.00 in 2023, reflecting the company's ability to sell and replace its inventory more frequently. This signifies that Andersons Inc. is efficiently managing its inventory levels and is able to generate sales from its inventory at a faster rate.
A high inventory turnover ratio generally indicates that a company is effectively managing its inventory and avoiding overstocking, which can tie up capital and lead to higher storage costs. It also suggests that the company has strong sales relative to its inventory levels.
Overall, the increasing trend in Andersons Inc.'s inventory turnover ratio is a positive sign of the company's operational efficiency and effective inventory management practices. It is essential for businesses to strike a balance between maintaining sufficient inventory levels to meet customer demand and ensuring that excess inventory is not tying up valuable resources.
Peer comparison
Dec 31, 2023