Dorman Products Inc (DORM)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,746,930	1,591,300	1,200,000	985,975	910,901
Inventory	US$ in thousands	637,375	755,901	531,988	298,719	280,813
Inventory turnover		2.74	2.11	2.26	3.30	3.24

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,746,930K ÷ $637,375K
= 2.74

Dorman Products Inc's inventory turnover has fluctuated over the last five years, ranging from a low of 1.55 in 2022 to a high of 2.38 in 2020. The inventory turnover ratio indicates how efficiently the company is managing its inventory by measuring how many times a company sells and replaces its inventory during a specific period.

A higher inventory turnover generally indicates that the company is selling its inventory quickly and efficiently, which can be a positive sign of strong sales performance. Conversely, a lower inventory turnover may suggest that the company is holding onto inventory for a longer period, which could tie up working capital and potentially lead to obsolete inventory issues.

Analyzing Dorman Products Inc's inventory turnover trend can provide insights into its inventory management practices and operational efficiency. In recent years, there has been some variability in the inventory turnover ratio, which could be attributed to changes in sales volume, inventory management strategies, or market demand fluctuations. Further examination of the reasons behind these fluctuations can help determine any underlying operational or strategic drivers impacting inventory turnover.