Lear Corporation (LEA)

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	22,403,100	21,966,900	21,449,500	20,635,400	20,330,300	19,944,500	19,121,700	18,750,000	18,686,800	13,833,800	9,623,400	7,807,000	7,044,100	11,784,600	16,298,700	18,262,300	18,880,200	18,751,800	18,755,800	19,166,000
Inventory	US$ in thousands	1,758,000	1,788,300	1,702,600	1,676,200	1,573,600	1,594,100	1,612,800	1,642,100	1,571,900	1,766,000	1,590,300	1,464,800	1,401,100	1,265,600	1,245,400	1,324,300	1,258,200	1,294,100	1,240,300	1,200,500
Inventory turnover		12.74	12.28	12.60	12.31	12.92	12.51	11.86	11.42	11.89	7.83	6.05	5.33	5.03	9.31	13.09	13.79	15.01	14.49	15.12	15.97

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $22,403,100K ÷ $1,758,000K
= 12.74

The inventory turnover of Lear Corp. has been relatively stable over the past eight quarters, ranging from 10.90 to 12.38. This ratio indicates how efficiently the company is managing its inventory by showing how many times it sells and replaces its inventory during a period.

A high inventory turnover ratio generally suggests that Lear Corp. is effectively managing its inventory levels and turning over its stock quickly, which can be a positive sign of operational efficiency. It signifies that the company is selling its products efficiently and not holding onto excess inventory that could lead to potential obsolescence or storage costs.

The consistency in the inventory turnover ratio over the quarters indicates that Lear Corp. has maintained a steady pace of inventory management, ensuring that its goods are sold and replenished at a consistent rate. This can help the company optimize its working capital and cash flow by minimizing the amount of capital tied up in inventory.

Overall, the inventory turnover ratio for Lear Corp. reflects a healthy and efficient inventory management strategy, contributing to the company's operational effectiveness and financial performance.