Dorman Products Inc (DORM)

Inventory turnover

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cost of revenue US$ in thousands 1,202,840 1,244,360 1,169,300 882,333 709,632
Inventory US$ in thousands 707,977 637,375 755,901 531,988 298,719
Inventory turnover 1.70 1.95 1.55 1.66 2.38

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,202,840K ÷ $707,977K
= 1.70

Based on the inventory turnover data provided for Dorman Products Inc, we observe a fluctuating trend over the years.

In 2020, the inventory turnover ratio stood at 2.38, indicating that the company's inventory was being turned over approximately 2.38 times during that year. This suggests efficient management of inventory.

However, in the subsequent years, the inventory turnover ratio decreased. By the end of 2021, the ratio dropped to 1.66, indicating a slowdown in inventory turnover. This could imply that the company might have been carrying excess inventory or facing challenges in selling its products.

The trend continued in 2022, with the inventory turnover ratio falling further to 1.55, suggesting a potential issue with inventory management that could impact the company's liquidity and profitability.

By the end of 2023, the inventory turnover ratio improved to 1.95, showing a slight recovery in the efficiency of managing inventory. Nevertheless, the ratio remained below the initial 2020 level.

In 2024, the inventory turnover ratio decreased to 1.70, indicating a decrease in the speed at which inventory was being sold. This might raise concerns about the company's ability to efficiently manage its inventory levels.

Overall, the decreasing trend in inventory turnover ratios over the years may warrant a closer examination of Dorman Products Inc's inventory management practices and sales strategy to identify areas for improvement and potential efficiencies.