Topbuild Corp (BLD)
Inventory turnover
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 4,464,950 | 4,429,040 | 4,411,910 | 4,398,060 | 4,338,140 | 4,220,010 | 3,846,653 | 3,475,201 | 3,104,475 | 2,753,963 | 2,633,512 | 2,491,347 | 2,426,304 | 2,384,083 | 2,389,883 | 2,408,126 | 2,387,427 | 2,245,660 | 2,124,002 | 1,995,684 |
| Inventory | US$ in thousands | 364,731 | 357,179 | 385,049 | 422,229 | 438,644 | 447,100 | 431,098 | 390,061 | 352,801 | 202,018 | 178,576 | 163,988 | 161,369 | 142,517 | 147,304 | 152,721 | 149,078 | 146,702 | 150,282 | 160,689 |
| Inventory turnover | 12.24 | 12.40 | 11.46 | 10.42 | 9.89 | 9.44 | 8.92 | 8.91 | 8.80 | 13.63 | 14.75 | 15.19 | 15.04 | 16.73 | 16.22 | 15.77 | 16.01 | 15.31 | 14.13 | 12.42 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $4,464,950K ÷ $364,731K
= 12.24
TopBuild Corp's inventory turnover has shown a generally positive trend over the past eight quarters. The inventory turnover ratio measures how efficiently the company manages its inventory by indicating how many times the inventory is sold and replaced during a specific period.
In Q4 2023, the inventory turnover ratio stood at 9.85 times, which indicates that, on average, the company sold and replaced its inventory approximately 9.85 times during the quarter. This represents a slight decrease from Q3 2023, where the ratio was 10.04.
Comparing the Q4 2023 ratio to the same quarter in the previous year (Q4 2022), there has been significant improvement from 8.03 to 9.85, reflecting better inventory management efficiency.
Overall, the upward trend in inventory turnover ratios indicates that TopBuild Corp has been improving its inventory management practices and effectively managing its inventory levels to meet customer demand. A higher inventory turnover ratio generally implies that the company is selling its products more quickly, which can potentially lead to higher profitability and better cash flow management.