Armstrong World Industries Inc (AWI)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,514,500	1,435,400	1,357,700	1,107,300	1,139,500
Inventory	US$ in thousands	104,000	110,000	90,200	81,500	68,500
Inventory turnover		14.56	13.05	15.05	13.59	16.64

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,514,500K ÷ $104,000K
= 14.56

Armstrong World Industries Inc. has demonstrated a consistent and relatively high inventory turnover ratio over the five-year period analyzed. The inventory turnover ratios range from 7.13 to 9.39 during this period, indicating that the company efficiently manages its inventory levels.

A high inventory turnover ratio signifies that Armstrong World Industries Inc. is able to sell its inventory quickly and effectively, minimizing the risk of obsolete or expired inventory. This efficient management of inventory turnover suggests that the company is adept at matching its production with consumer demand, thereby reducing carrying costs and improving cash flow.

The slight fluctuations in the inventory turnover ratios over the years may be reflective of changes in market demand, production efficiency, or inventory management strategies. Overall, the consistent performance in inventory turnover underscores Armstrong World Industries Inc.'s ability to effectively manage its inventory and optimize its operational efficiency.