Dril-Quip Inc (DRQ)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 308,503 | 265,935 | 242,356 | 269,698 | 295,007 |
| Inventory | US$ in thousands | 194,593 | 146,004 | 145,724 | 212,536 | 205,062 |
| Inventory turnover | 1.59 | 1.82 | 1.66 | 1.27 | 1.44 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $308,503K ÷ $194,593K
= 1.59
The inventory turnover ratio for Dril-Quip, Inc. has fluctuated over the past five years, ranging from 1.27 in 2020 to 1.82 in 2022. This ratio indicates how efficiently the company is managing its inventory levels by measuring the number of times inventory is sold and replaced within a specific period.
A decreasing trend in inventory turnover from 2020 to 2022 suggests that the company took longer to sell its inventory during those years. However, there was an improvement in 2023 with the ratio increasing to 1.59. This increase may signal better inventory management or increased sales efficiency during the year.
Dril-Quip's inventory turnover ratios, although fluctuating, generally fall within a moderate range. It is important for the company to strike a balance between carrying enough inventory to meet demand and avoiding excess holding costs. Further analysis of the company's operations and industry trends can provide insights into optimizing inventory turnover for improved efficiency and profitability.
Peer comparison
Dec 31, 2023