American Axle & Manufacturing (AXL)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	5,455,200	5,097,500	4,433,900	4,128,100	5,628,300
Inventory	US$ in thousands	482,900	463,900	410,400	323,200	373,600
Inventory turnover		11.30	10.99	10.80	12.77	15.07

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $5,455,200K ÷ $482,900K
= 11.30

Inventory turnover is a crucial financial ratio that measures how efficiently a company manages its inventory by indicating how many times the inventory is sold and replaced during a specific period. American Axle & Manufacturing Holdings Inc's inventory turnover has fluctuated over the past five years, ranging from 10.80 to 15.07.

The decreasing trend from 15.07 in 2019 to 11.30 in 2023 indicates that the company is taking longer to sell its inventory or is carrying more inventory on hand. A lower inventory turnover can suggest potential issues such as overstocking, slow-moving inventory, or changing customer demand.

On the positive side, American Axle & Manufacturing Holdings Inc's inventory turnover is still within a reasonable range, demonstrating that the company is efficiently managing its inventory compared to the industry average. It is important for the company to monitor this ratio regularly to ensure optimal inventory management and avoid potential cash flow issues or inefficiencies.