LCI Industries (LCII)

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	3,008,618	3,079,564	3,210,222	3,540,763	3,933,844	4,107,749	4,142,452	3,851,501	3,429,662	3,094,016	2,786,578	2,347,492	2,090,076	1,945,917	1,790,375	1,873,767	1,832,280	1,824,103	1,851,698	1,905,282
Inventory	US$ in thousands	768,407	791,884	830,020	909,385	1,029,700	1,079,900	1,155,170	1,136,230	1,095,910	790,651	620,183	535,056	493,899	369,160	328,986	350,514	393,607	334,462	301,159	324,522
Inventory turnover		3.92	3.89	3.87	3.89	3.82	3.80	3.59	3.39	3.13	3.91	4.49	4.39	4.23	5.27	5.44	5.35	4.66	5.45	6.15	5.87

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,008,618K ÷ $768,407K
= 3.92

Inventory turnover is a critical financial ratio that indicates how efficiently a company manages its inventory. It is calculated by dividing the Cost of Goods Sold (COGS) by the average inventory for a specific period. A higher inventory turnover ratio generally signifies that a company is selling its products quickly and efficiently, while a lower ratio may indicate overstocking or slow-moving inventory.

Based on the data provided for LCI Industries, the inventory turnover ratios for the past eight quarters have ranged from 3.39 to 3.92. The inventory turnover appears to have fluctuated slightly over the quarters but has remained relatively stable around the range of 3.39 to 3.92.

Analyzing the trend, we observe a general increase in inventory turnover from Q1 2022 to Q4 2023, indicating an improvement in inventory management efficiency during this period. The company has shown consistency in maintaining inventory turnover above 3.0, which is a positive sign of efficient inventory management.

However, it is essential to consider industry benchmarks and company-specific factors when assessing inventory turnover. Comparing LCI Industries' inventory turnover with industry peers can provide further insights into its performance. Additionally, a detailed analysis of inventory levels, sales trends, and procurement practices can offer a more comprehensive understanding of the company's inventory management effectiveness.