Genuine Parts Co (GPC)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 21,317,600 | 20,560,000 | 17,693,500 | 16,138,700 | 18,476,800 |
| Inventory | US$ in thousands | 4,676,690 | 4,441,650 | 3,889,920 | 3,506,270 | 3,443,880 |
| Inventory turnover | 4.56 | 4.63 | 4.55 | 4.60 | 5.37 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $21,317,600K ÷ $4,676,690K
= 4.56
Genuine Parts Co. has shown a consistent trend in its inventory turnover ratio over the past five years. The inventory turnover ratio measures how efficiently the company manages its inventory by indicating the number of times inventory is sold and replaced within a given period.
The inventory turnover ratios for Genuine Parts Co. from 2019 to 2023 were 3.41, 3.10, 3.15, 3.23, and 3.16 respectively. The company's inventory turnover has ranged from 3.10 to 3.41 over the period, indicating relatively stable performance in managing its inventory levels.
A higher inventory turnover ratio generally suggests that a company is efficiently managing its inventory by quickly selling and replenishing stock. In contrast, a lower inventory turnover ratio could imply slower sales, excess inventory, or inefficiencies in managing stock levels.
Genuine Parts Co.'s inventory turnover ratio has been relatively consistent, demonstrating efficient management of its inventory levels. Despite minor fluctuations, the company has maintained a healthy balance between stocking an adequate level of inventory to meet demand and avoiding excess inventory buildup that could tie up capital.