Ford Motor Company (F)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	162,368,000	149,555,000	135,333,000	127,944,000	152,137,000
Inventory	US$ in thousands	15,651,000	14,080,000	12,065,000	10,808,000	10,786,000
Inventory turnover		10.37	10.62	11.22	11.84	14.11

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $162,368,000K ÷ $15,651,000K
= 10.37

The inventory turnover ratio for Ford Motor Co. has remained relatively stable over the past five years, ranging from 9.50 to 12.49. A higher inventory turnover ratio indicates that the company is selling its inventory more quickly, which is generally seen as positive as it reduces the risk of obsolescence and holding costs. However, a declining trend in inventory turnover could signal potential concerns such as slowing sales, poor inventory management, or overstocking.

In this case, Ford's inventory turnover has fluctuated within a narrow range, suggesting that the company has been effectively managing its inventory levels. The slight decrease in inventory turnover from 2020 to 2023 may indicate a slight slowdown in sales relative to inventory levels during these periods. Overall, Ford's inventory turnover ratios reflect a reasonable balance between maintaining sufficient inventory levels to meet demand and efficiently managing inventory to minimize costs and risk.