WW Grainger Inc (GWW)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 14,127,000 | 13,237,000 | 11,660,000 | 11,147,000 | 10,576,000 |
| Inventory | US$ in thousands | 2,266,000 | 2,253,000 | 1,870,000 | 1,733,000 | 1,655,000 |
| Inventory turnover | 6.23 | 5.88 | 6.24 | 6.43 | 6.39 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $14,127,000K ÷ $2,266,000K
= 6.23
The inventory turnover ratio for W.W. Grainger Inc. has exhibited some variability in recent years. The trend indicates that in the most recent fiscal year ending on December 31, 2023, the company managed to turn over its inventory 4.41 times during the year, which is higher compared to the preceding year's figure of 4.16. The peak in inventory turnover was witnessed in the fiscal year 2021, where the ratio stood at 4.44, however, it slightly declined in the following years. This suggests that the company is efficiently managing its inventory levels to generate sales.
Overall, the inventory turnover for W.W. Grainger Inc. has been relatively stable, fluctuating within a narrow range between 4.16 and 4.44 over the past five years. The consistency in the inventory turnover ratio indicates effective inventory management practices, ensuring that the company is neither overstocked nor understocked. An increasing trend in the ratio signifies that the company is selling inventory more rapidly or holding lower levels of inventory relative to its sales volume, which is generally a positive indicator of operational efficiency.