Graham Holdings Co (GHC)

Inventory turnover

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cost of revenue (ttm) US$ in thousands 3,386,486 3,400,596 3,325,685 3,229,444 3,136,695 2,992,287 2,905,457 2,769,431 2,657,718 2,502,834 2,356,754 2,258,801 2,114,521 2,054,742 1,984,025 1,883,917 1,910,123 1,933,431 1,973,406 2,043,402
Inventory US$ in thousands 295,808 306,501 323,542 326,658 297,211 279,211 259,224 246,220 226,811 209,804 178,280 156,678 141,471 100,258 126,395 132,136 120,622 124,258 121,490 117,440
Inventory turnover 11.45 11.09 10.28 9.89 10.55 10.72 11.21 11.25 11.72 11.93 13.22 14.42 14.95 20.49 15.70 14.26 15.84 15.56 16.24 17.40

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,386,486K ÷ $295,808K
= 11.45

Graham Holdings Co's inventory turnover has shown a declining trend over the analyzed period, from 17.40 in March 2020 to 11.45 in December 2024. This indicates that the company is taking longer to sell its inventory, which could be a sign of potential issues such as overstocking, slowing sales, or poor inventory management.

A high inventory turnover ratio is generally desirable as it signifies that the company is efficiently managing its inventory, converting goods into sales quickly, and minimizing holding costs. Conversely, a decreasing inventory turnover ratio could suggest inefficiencies in inventory management, potential obsolescence issues, or decreasing demand for the company's products.

It is crucial for Graham Holdings Co to closely monitor its inventory turnover ratio and take appropriate actions to address the underlying issues that may be contributing to the declining trend. This could involve optimizing inventory levels, improving demand forecasting, enhancing supply chain efficiency, or exploring product diversification strategies to stimulate sales and improve overall inventory turnover performance.