Aramark Holdings (ARMK)

Inventory turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	18,178,700	15,307,300	11,563,300	12,732,600	15,336,200
Inventory	US$ in thousands	403,707	552,386	412,676	436,473	411,319
Inventory turnover		45.03	27.71	28.02	29.17	37.29

September 30, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $18,178,700K ÷ $403,707K
= 45.03

Aramark Holdings has shown variability in its inventory turnover ratio over the past five years. The inventory turnover ratio measures the efficiency at which the company manages its inventory levels.

In 2023, the inventory turnover ratio significantly increased to 45.03 times, indicating that Aramark Holdings sold and replaced its inventory much more frequently compared to the previous year. This may suggest effective inventory management practices, quicker inventory turnover, and potentially lower holding costs.

On the other hand, in 2022, there was a decrease in the inventory turnover ratio to 27.71 times, signaling a decrease in the efficiency of inventory management compared to 2021. This could imply that the company may have excess or obsolete inventory on hand, which could tie up working capital and result in higher holding costs.

Compared to 2020 and 2019, where the inventory turnover ratios were 29.17 and 37.29 respectively, Aramark Holdings generally showed efficient inventory management during those periods.

Overall, it is essential for Aramark Holdings to monitor its inventory turnover ratio closely to ensure optimal inventory levels, reduce holding costs, and improve overall operational efficiency.