Green Brick Partners Inc (GRBK)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	1,229,530	1,234,770	1,040,820	741,417	622,578
Inventory	US$ in thousands	1,533,220	1,422,680	1,203,740	844,635	753,567
Inventory turnover		0.80	0.87	0.86	0.88	0.83

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $1,229,530K ÷ $1,533,220K
= 0.80

The inventory turnover of Green Brick Partners Inc over the past five years has shown a fluctuating trend, ranging from 0.80 to 0.88. 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. A higher inventory turnover is generally preferable as it implies faster sales and reduced holding costs.

In the case of Green Brick Partners Inc, the inventory turnover has been relatively consistent, hovering around the range of 0.80 to 0.88, which indicates a moderate efficiency in managing inventory. However, it is important to note that a low inventory turnover may suggest overstocking or slow-moving inventory, potentially leading to increased storage costs and obsolescence risk.

To gain a deeper understanding of the company's inventory management practices, it would be beneficial to compare its inventory turnover with industry benchmarks and analyze any underlying reasons for the fluctuating trend observed over the years. Additionally, further investigation into the company's sales strategy, production processes, and supply chain management could provide valuable insights into improving inventory turnover efficiency.