Arrow Electronics Inc (ARW)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 28,958,100 | 32,287,800 | 30,274,700 | 25,482,200 | 25,618,500 |
| Inventory | US$ in thousands | 5,187,220 | 5,319,370 | 4,201,960 | 3,287,310 | 3,477,120 |
| Inventory turnover | 5.58 | 6.07 | 7.20 | 7.75 | 7.37 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $28,958,100K ÷ $5,187,220K
= 5.58
The inventory turnover ratio for Arrow Electronics Inc. has been declining steadily over the past five years. In 2019, the ratio was 7.37 times, indicating that the company's inventory was turning over approximately 7.37 times during the year. However, this ratio dropped to 7.20 times in 2021, further decreasing to 6.07 times in 2022, and then to 5.58 times in 2023.
A decreasing trend in the inventory turnover ratio could suggest that Arrow Electronics Inc. is taking longer to sell its inventory, which can have implications for its working capital management and profitability. A lower inventory turnover ratio may also indicate potential issues such as overstocking, slow-moving inventory, or declining sales.
It is important for Arrow Electronics Inc. to closely monitor its inventory management practices and take action to improve efficiency in inventory turnover to optimize its working capital and enhance overall financial performance.
Peer comparison
Dec 31, 2023