Fastenal Company (FAST)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 5,828,700 | 5,537,700 | 4,804,300 | 4,516,000 | 4,281,800 |
| Inventory | US$ in thousands | 1,522,700 | 1,708,000 | 1,523,600 | 1,337,500 | 1,366,400 |
| Inventory turnover | 3.83 | 3.24 | 3.15 | 3.38 | 3.13 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $5,828,700K ÷ $1,522,700K
= 3.83
The inventory turnover ratio of Fastenal Co. has shown a general upward trend over the past five years, from 2.06 in 2019 to 2.62 in 2023. This indicates that the company has been able to sell its inventory more efficiently and quickly in recent years.
A higher inventory turnover ratio suggests that Fastenal Co. is managing its inventory effectively, turning over its stock more frequently, and minimizing the amount of capital tied up in inventory. This could be attributed to better inventory management practices, improved demand forecasting, or a more streamlined supply chain.
Overall, the increasing trend in Fastenal Co.'s inventory turnover ratio reflects positively on the company's operational efficiency and ability to generate sales from its inventory. It also indicates that the company has been successful in optimizing its inventory levels to meet customer demand while reducing the risk of obsolete inventory.
Peer comparison
Dec 31, 2023