Dorman Products Inc (DORM)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	1,202,838	1,196,323	1,201,321	1,214,833	1,249,839	1,287,798	1,264,389	1,223,221	1,169,299	1,092,551	1,042,564	967,180	882,333	805,420	766,667	720,191	709,632	681,091	655,144	668,137
Inventory	US$ in thousands	707,977	665,237	620,371	619,972	637,375	625,593	642,721	686,949	755,901	677,898	634,774	565,200	531,988	475,462	356,759	337,697	298,719	283,292	274,821	258,371
Inventory turnover		1.70	1.80	1.94	1.96	1.96	2.06	1.97	1.78	1.55	1.61	1.64	1.71	1.66	1.69	2.15	2.13	2.38	2.40	2.38	2.59

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,202,838K ÷ $707,977K
= 1.70

The inventory turnover ratio of Dorman Products Inc has shown a declining trend over the past few years, indicating that the company is taking longer to sell its inventory. From March 31, 2020, to December 31, 2024, the inventory turnover decreased from 2.59 to 1.70, with some fluctuations in between.

A decreasing inventory turnover ratio could suggest that the company is either overstocked or facing challenges in efficiently managing its inventory. A lower ratio may also indicate potential issues such as slow-moving inventory, obsolete stock, or changing consumer preferences leading to inventory write-offs.

It is important for Dorman Products Inc to closely monitor its inventory turnover ratio and implement strategies to improve inventory management, such as streamlining procurement processes, optimizing warehousing, enhancing demand forecasting, and addressing slow-moving inventory. This will help the company optimize its working capital, reduce carrying costs, and maintain a healthy cash flow position.