Group 1 Automotive Inc (GPI)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 16,823,000 | 15,057,800 | 12,604,900 | 10,296,200 | 11,685,500 |
| Inventory | US$ in thousands | 1,963,400 | 1,356,600 | 1,073,100 | 1,446,400 | 1,901,700 |
| Inventory turnover | 8.57 | 11.10 | 11.75 | 7.12 | 6.14 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $16,823,000K ÷ $1,963,400K
= 8.57
Group 1 Automotive, Inc.'s inventory turnover has shown fluctuations over the past five years. The inventory turnover ratio measures how efficiently a company is managing its inventory by calculating how many times it sells and replaces its inventory over a period. A higher inventory turnover ratio implies that the company is selling its inventory quickly, which is generally favorable.
In this case, we observe that Group 1 Automotive's inventory turnover ratio was 7.57 in 2023, indicating that the company sold and replaced its inventory approximately 7.57 times during the year. This demonstrates a decrease from the previous year's ratio of 9.77 in 2022.
The decline in the inventory turnover ratio from 2022 to 2023 may suggest that Group 1 Automotive took longer to sell and replace its inventory in 2023 compared to the previous year. However, it is essential to note that inventory turnover ratios can vary based on industry norms, seasonality, and company-specific factors.
Further analysis and comparison with industry benchmarks and peers could provide more insights into the efficiency of Group 1 Automotive's inventory management practices and identify areas for improvement to enhance operational efficiency and profitability.
Peer comparison
Dec 31, 2023