Garmin Ltd (GRMN)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	2,884,819	2,807,132	2,716,181	2,653,697	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	2,068,321	1,971,721	1,923,960	1,907,429
Inventory	US$ in thousands	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	752,908	749,825	648,140	598,387
Inventory turnover		2.14	1.95	1.94	1.79	1.89	1.75	1.84	2.01	2.10	2.44	2.81	2.88	3.03	2.66	2.57	2.67	2.75	2.63	2.97	3.19

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,884,819K ÷ $1,345,960K
= 2.14

Inventory turnover is a crucial financial ratio that indicates how efficiently a company manages its inventory. Garmin Ltd's inventory turnover has fluctuated over the past years, ranging from 1.75 to 3.19. A higher inventory turnover ratio signifies that the company sells its inventory quickly, which is generally preferred as it reduces holding costs and minimizes the risk of obsolescence.

In the most recent period (Dec 31, 2023), Garmin's inventory turnover was 2.14, indicating that the company turned over its inventory approximately 2.14 times during the year. The downward trend in inventory turnover from 3.19 in Mar 31, 2019, to 2.14 in Dec 31, 2023, could suggest a potential issue with inventory management efficiency or sales performance over the years.

It is essential for Garmin Ltd to closely monitor its inventory turnover and analyze the underlying factors affecting the ratio to optimize inventory levels, streamline operations, and enhance overall financial performance. Further investigation into the reasons behind the fluctuating inventory turnover ratios can provide valuable insights for strategic decision-making and improving the company's operational efficiency.