Garmin Ltd (GRMN)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Cost of revenue (ttm)	US$ in thousands	3,739,972	3,535,637	3,386,684	3,230,893	3,119,146	3,041,459	2,950,508	2,888,024	2,860,034	2,683,150	2,682,210	2,690,805	2,578,231	2,712,875	2,637,679	2,412,319	2,310,280	2,183,433	2,091,782	2,113,542
Inventory	US$ in thousands	1,473,980	1,505,540	1,319,640	1,302,230	1,345,960	1,439,890	1,402,220	1,479,000	1,515,040	1,533,270	1,454,870	1,339,530	1,227,610	1,113,500	938,607	837,934	762,084	821,377	813,243	790,180
Inventory turnover		2.54	2.35	2.57	2.48	2.32	2.11	2.10	1.95	1.89	1.75	1.84	2.01	2.10	2.44	2.81	2.88	3.03	2.66	2.57	2.67

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,739,972K ÷ $1,473,980K
= 2.54

Inventory turnover is a key financial ratio that measures how efficiently a company is managing its inventory. In the case of Garmin Ltd, the inventory turnover ratio has fluctuated over the past few years.

At the end of December 31, 2020, the inventory turnover ratio was at its highest at 3.03, indicating that Garmin was able to sell and replace its inventory 3.03 times during that year. This suggests a relatively efficient inventory management process.

However, the ratio started to decline in the following periods, reaching a low of 1.75 at the end of September 30, 2022. This could imply potential issues with inventory management, such as overstocking or slow-moving inventory.

Despite some fluctuations, the inventory turnover ratio has remained relatively stable since then, hovering between 1.84 and 2.57. This indicates that Garmin has been able to maintain a moderate level of efficiency in managing its inventory.

Overall, Garmin's inventory turnover ratio has shown some variability over the years, but it is important for the company to continue monitoring and optimizing its inventory management practices to ensure efficient operations and profitability.