Builders FirstSource Inc (BLDR)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	15,258,800	19,260,700	17,866,700	8,043,440	6,909,400
Inventory	US$ in thousands	1,228,260	1,426,200	1,626,240	784,527	561,255
Inventory turnover		12.42	13.50	10.99	10.25	12.31

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $15,258,800K ÷ $1,228,260K
= 12.42

Builders Firstsource Inc's inventory turnover ratio has fluctuated over the past five years. The company's inventory turnover was highest in December 2022 at 10.50 times, indicating that the company sold and replaced its inventory 10.50 times during that year. In contrast, the lowest inventory turnover was recorded in December 2020 at 8.08 times.

Overall, the inventory turnover ratio has remained relatively stable, with a mean turnover of approximately 9.14 times over the past five years. This implies that Builders Firstsource Inc typically sells and replaces its inventory around 9 times per year, indicating efficient management of inventory levels.

A high inventory turnover ratio is generally perceived positively as it suggests that the company is efficiently managing its inventory and turning it into sales quickly. Conversely, a low inventory turnover could indicate potential issues such as overstocking or slow-moving inventory. Builders Firstsource Inc's varying inventory turnover ratios over the years may require further analysis to understand the factors driving these fluctuations and assess their impact on the company's overall operational efficiency and financial performance.