Gentex Corporation (GNTX)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	1,690,010	1,668,820	1,437,340	1,225,820	1,195,100
Inventory	US$ in thousands	436,497	402,473	404,360	316,267	226,292
Inventory turnover		3.87	4.15	3.55	3.88	5.28

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,690,010K ÷ $436,497K
= 3.87

Inventory turnover is a key financial ratio that measures how efficiently a company is managing its inventory. In the case of Gentex Corporation, the inventory turnover has shown fluctuation over the past five years.

As of December 31, 2020, Gentex Corporation had an inventory turnover ratio of 5.28, indicating that the company's inventory was being sold and replaced approximately 5.28 times during that year. This suggests efficient inventory management.

However, the inventory turnover ratio decreased to 3.88 by December 31, 2021, and further to 3.55 by December 31, 2022. These declines indicate a decrease in the frequency of inventory turnover, which could signal potential issues such as overstocking or slowing sales.

Gentex Corporation's inventory turnover ratio then increased to 4.15 by December 31, 2023, before declining again to 3.87 by December 31, 2024. Although the company's inventory turnover improved in 2023, the subsequent decrease in 2024 suggests a potential inefficiency in managing inventory levels.

Overall, the fluctuation in Gentex Corporation's inventory turnover ratio over the past five years indicates the need for the company to closely monitor its inventory levels and sales performance to ensure optimal inventory management and operational efficiency.