WW Grainger Inc (GWW)
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 | 14,016,000 | 13,847,000 | 13,645,000 | 13,427,000 | 13,130,000 | 12,797,000 | 12,392,000 | 11,962,000 | 11,566,000 | 11,242,000 | 10,946,000 | 10,705,000 | 11,000,000 | 11,000,000 | 10,971,000 | 10,852,000 | 10,281,000 | 10,088,000 | 10,125,180 | 10,142,350 |
| Inventory | US$ in thousands | 2,266,000 | 2,196,000 | 2,223,000 | 2,252,000 | 2,253,000 | 2,071,000 | 1,990,000 | 1,929,000 | 1,870,000 | 1,786,000 | 1,707,000 | 1,675,000 | 1,733,000 | 1,780,000 | 1,695,000 | 1,615,000 | 1,655,000 | 1,520,000 | 1,535,000 | 1,523,000 |
| Inventory turnover | 6.19 | 6.31 | 6.14 | 5.96 | 5.83 | 6.18 | 6.23 | 6.20 | 6.19 | 6.29 | 6.41 | 6.39 | 6.35 | 6.18 | 6.47 | 6.72 | 6.21 | 6.64 | 6.60 | 6.66 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $14,016,000K ÷ $2,266,000K
= 6.19
The inventory turnover for W.W. Grainger Inc. has been relatively stable over the past eight quarters, ranging between 4.16 and 4.48. This indicates that, on average, the company is able to sell and replace its inventory approximately 4.3 to 4.5 times within a year. A higher inventory turnover ratio suggests that the company is efficiently managing its inventory levels and effectively converting inventory into sales.
While the fluctuations in the inventory turnover ratio are minor, it is worth noting that the ratio has gradually decreased from 4.47 in Q2 2022 to 4.25 in Q1 2023. This marginal decline may signal a slightly slower inventory turnover rate during this period. However, the company has since shown signs of improvement with a slight increase in the ratio in Q3 and Q4 2023.
Overall, W.W. Grainger Inc. appears to be effectively managing its inventory turnover, which is important for optimizing working capital utilization and maintaining healthy liquidity levels. Continued monitoring of the inventory turnover ratio will be beneficial to assess the company's inventory management efficiency and operational performance.