Graphic Packaging Holding Company (GPK)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 7,706,000 | 8,255,000 | 8,538,000 | 6,771,000 | 5,459,800 |
| Inventory | US$ in thousands | 1,754,000 | 1,754,000 | 1,606,000 | 1,387,000 | 1,128,000 |
| Inventory turnover | 4.39 | 4.71 | 5.32 | 4.88 | 4.84 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $7,706,000K ÷ $1,754,000K
= 4.39
Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory. In the case of Graphic Packaging Holding Company, we observe fluctuations in the inventory turnover over the past five years.
The inventory turnover ratio increased from 4.84 in December 2020 to 5.32 in December 2022, indicating that the company was able to sell and replace its inventory at a faster rate during this period. This improvement suggests a more efficient inventory management process, potentially leading to reduced carrying costs and better utilization of resources.
However, in December 2023 and December 2024, the inventory turnover ratio decreased to 4.71 and 4.39, respectively. A declining inventory turnover could indicate excess inventory levels, slow-moving goods, or challenges in matching production with demand. This trend highlights the importance of monitoring inventory levels closely to avoid liquidity issues and potential write-downs.
Overall, while the inventory turnover ratio of Graphic Packaging Holding Company showed variability over the past five years, it is essential for the company to maintain a balance and ensure optimal inventory management practices to support sustainable business growth and profitability.
Peer comparison
Dec 31, 2024