Aramark Holdings (ARMK)

Inventory turnover

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Cost of revenue (ttm)	US$ in thousands	16,770,530	17,209,730	17,541,160	17,920,430	18,108,700	17,139,110	16,572,770	15,871,210	15,255,130	14,526,740	13,454,220	12,550,030	11,506,980	10,782,170	10,362,920	11,238,310	12,443,750	13,680,040	14,787,300	14,737,520
Inventory	US$ in thousands	387,601	370,423	388,279	367,614	403,707	593,168	609,589	569,815	552,386	514,887	435,614	393,268	412,676	402,875	424,473	427,195	436,473	426,766	403,799	397,933
Inventory turnover		43.27	46.46	45.18	48.75	44.86	28.89	27.19	27.85	27.62	28.21	30.89	31.91	27.88	26.76	24.41	26.31	28.51	32.06	36.62	37.04

September 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $16,770,530K ÷ $387,601K
= 43.27

Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory by evaluating how many times a company sells and replaces its inventory during a specific period. The inventory turnover for Aramark Holdings has shown fluctuations over the past several quarters, ranging from a low of 24.41 to a high of 48.75.

Analyzing the trend, we observe that the inventory turnover ratio has generally been on an increasing trend since December 2019, with occasional fluctuations. The most recent inventory turnover ratio for September 30, 2024, stood at 43.27, indicating that the company sold and replaced its inventory approximately 43 times during that period.

A higher inventory turnover ratio typically signifies that a company is efficiently managing its inventory, which can lead to lower holding costs, fewer obsolete items, and quicker cash conversion cycle. In the case of Aramark Holdings, the recent ratios above 40 suggest the company is effectively managing its inventory and moving goods through the supply chain at a fast pace.

However, it is essential to consider industry benchmarks and compare the inventory turnover ratio with competitors to gain more valuable insights into the company's inventory management performance. Additionally, further analysis should be conducted to understand the reasons behind the fluctuations in the inventory turnover ratio and its impact on the overall financial health and operational efficiency of Aramark Holdings.