Builders FirstSource Inc (BLDR)

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	15,258,810	15,437,030	16,284,530	17,878,400	19,195,000	19,381,360	19,321,570	18,668,560	17,866,610	16,085,300	13,482,540	10,327,050	8,043,440	7,409,080	7,104,850	7,072,960	6,900,600	6,955,370	7,095,190	7,290,420
Inventory	US$ in thousands	1,228,260	1,331,510	1,362,250	1,336,160	1,426,200	1,758,880	2,065,350	2,188,060	1,626,240	1,616,550	2,074,450	1,585,610	784,527	751,149	615,142	640,048	561,255	581,543	617,527	635,499
Inventory turnover		12.42	11.59	11.95	13.38	13.46	11.02	9.36	8.53	10.99	9.95	6.50	6.51	10.25	9.86	11.55	11.05	12.29	11.96	11.49	11.47

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $15,258,810K ÷ $1,228,260K
= 12.42

Builders Firstsource Inc's inventory turnover has shown some fluctuation over the past eight quarters. The highest inventory turnover was recorded in Q4 2022 at 10.50, indicating that the company sold and replaced its inventory 10.5 times during that period. This was followed by Q1 2023 with a turnover of 10.21.

Overall, the inventory turnover has been relatively healthy and consistent, hovering around 8 to 10 times per year. Higher inventory turnover generally indicates that the company is efficiently managing its inventory levels and selling products quickly. A consistent inventory turnover ratio is essential for maintaining optimal cash flow and avoiding excessive inventory holding costs.

It is worth noting that a higher inventory turnover ratio may also indicate strong sales or efficient inventory management practices. However, a sudden decrease or fluctuation in this ratio may warrant further investigation into potential issues such as slow-moving inventory, overstocking, or declining sales. Overall, the trend in Builders Firstsource Inc's inventory turnover reflects a reasonably healthy operational performance in managing its inventory levels efficiently.