Dorman Products Inc (DORM)

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	1,615,065	1,670,618	1,615,513	1,555,695	1,591,301	1,479,767	1,410,829	1,309,804	1,198,298	1,101,224	1,052,436	998,868	985,975	947,639	917,825	928,318	909,599	908,039	885,427	853,842
Inventory	US$ in thousands	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	280,813	282,087	291,739	288,862
Inventory turnover		2.53	2.67	2.51	2.26	2.11	2.18	2.22	2.32	2.25	2.32	2.95	2.96	3.30	3.35	3.34	3.59	3.24	3.22	3.03	2.96

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,615,065K ÷ $637,375K
= 2.53

In analyzing Dorman Products Inc's inventory turnover over the past eight quarters, we observe fluctuations in the efficiency of managing its inventory. The inventory turnover ratio measures how many times a company sells and replaces its inventory in a given period, reflecting the effectiveness of inventory management.

Dorman's inventory turnover ranged from 1.55 to 2.06 over the past two years, showing variations in how efficiently the company converted its inventory into sales. A higher turnover ratio generally indicates that a company is selling its inventory quickly, which can be a positive sign of efficient operations and strong demand for its products.

The trend in Dorman's inventory turnover shows that it peaked at 2.06 in Q3 2023, indicating a notable improvement in inventory management efficiency compared to the previous quarters. However, the ratio decreased slightly to 1.95 in Q4 2023, suggesting a moderation in the speed of selling and replenishing inventory.

Overall, while there have been fluctuations in Dorman Products Inc's inventory turnover ratio, the company has generally maintained a healthy pace of inventory turnover, indicating effective management of its inventory levels. It is crucial for the company to continue monitoring and optimizing its inventory turnover to balance between stock availability and cost efficiency.