Topbuild Corp (BLD)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,464,950 | 4,336,220 | 3,104,480 | 2,426,300 | 2,387,400 |
| Inventory | US$ in thousands | 364,731 | 438,644 | 352,801 | 161,369 | 149,078 |
| Inventory turnover | 12.24 | 9.89 | 8.80 | 15.04 | 16.01 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $4,464,950K ÷ $364,731K
= 12.24
TopBuild Corp's inventory turnover has shown variability over the past five years, ranging from a low of 7.12 in 2021 to a high of 13.03 in 2019. The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a specific period, indicating the efficiency of inventory management.
A higher inventory turnover ratio suggests that TopBuild Corp is efficiently managing its inventory by selling and restocking goods quickly. However, the decreasing trend from 13.03 in 2019 to 9.85 in 2023 may indicate that the company is taking longer to sell and replace its inventory, which could potentially lead to higher holding costs or obsolete inventory issues.
Overall, TopBuild Corp should continue to monitor and improve its inventory turnover ratio to optimize its inventory management practices and ensure efficient use of resources.