International Paper (IP)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 15,218,000 | 16,498,000 | 15,715,000 | 16,121,000 | 17,192,000 |
| Inventory | US$ in thousands | 1,889,000 | 1,942,000 | 1,814,000 | 1,626,000 | 2,208,000 |
| Inventory turnover | 8.06 | 8.50 | 8.66 | 9.91 | 7.79 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $15,218,000K ÷ $1,889,000K
= 8.06
Inventory turnover is a key ratio that measures how efficiently a company manages its inventory by determining the number of times inventory is sold and replaced during a specific period. For International Paper Co., the inventory turnover has been relatively stable over the past five years, ranging from 6.91 to 7.80, with the latest value being 7.21. This indicates that, on average, International Paper Co. has been able to turn over its inventory approximately 7.21 times in the most recent year.
A higher inventory turnover ratio suggests that the company is selling its inventory more quickly, which is generally favorable as it reduces holding costs and ties up less capital in inventory. Conversely, a lower ratio may indicate overstocking, obsolete inventory, or difficulties in selling products.
Overall, International Paper Co. has demonstrated consistent efficiency in managing its inventory, maintaining healthy turnover levels over the years. Further analysis and comparison with industry peers would provide additional insights into the company's inventory management practices.
Peer comparison
Dec 31, 2023