Garmin Ltd (GRMN)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	3,088,800	2,860,040	2,787,860	2,310,280	2,068,320
Inventory	US$ in thousands	1,345,960	1,515,040	1,227,610	762,084	752,908
Inventory turnover		2.29	1.89	2.27	3.03	2.75

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $3,088,800K ÷ $1,345,960K
= 2.29

The inventory turnover ratio of Garmin Ltd has shown some fluctuations over the past five years. In 2023, the inventory turnover ratio was 2.29, indicating that the company's inventory was sold and replaced approximately 2.29 times during the year. This represents an improvement compared to the previous year, where the ratio was 1.89.

Although the inventory turnover ratio increased in 2023, it is still lower than the levels seen in 2020 and 2019, where the ratios were 3.03 and 2.75, respectively. A lower inventory turnover ratio can suggest inefficiencies in managing inventory, such as overstocking or slow-moving inventory.

It is important for Garmin Ltd to monitor its inventory turnover ratio closely to ensure efficient management of inventory levels and avoid tying up excess capital in unsold inventory. Analyzing the reasons behind the fluctuations in the inventory turnover ratio can provide valuable insights into the company's inventory management practices and overall operational efficiency.