Domino’s Pizza Inc (DPZ)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,751,940 | 2,888,550 | 2,669,130 | 2,522,920 | 2,216,280 |
| Inventory | US$ in thousands | 82,964 | 81,570 | 68,328 | 66,683 | 52,955 |
| Inventory turnover | 33.17 | 35.41 | 39.06 | 37.83 | 41.85 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,751,940K ÷ $82,964K
= 33.17
Analyzing the inventory turnover of Dominos Pizza Inc over the past five years reveals a trend of decreasing efficiency in managing inventory. The inventory turnover ratio, which indicates the number of times a company sells and replaces its inventory during a specific period, has shown a declining pattern.
In 2023, the inventory turnover ratio was calculated at 33.17, a decrease from the previous year's ratio of 35.41. This trend continues with decreases in inventory turnover ratios in 2022, 2021, and 2019, which were reported at 39.06, 37.83, and 41.85, respectively.
A declining inventory turnover ratio may imply that Dominos Pizza Inc is taking longer to sell its inventory or may have excess inventory on hand. This could potentially lead to increased holding costs, obsolete inventory issues, and reduced liquidity.
It would be advisable for the company to evaluate its inventory management practices and streamline its operations to improve inventory turnover efficiency and potentially maximize profitability.
Peer comparison
Dec 31, 2023