LKQ Corporation (LKQ)
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 | 8,291,000 | 7,967,000 | 7,617,000 | 7,557,000 | 7,571,000 | 7,710,000 | 7,835,000 | 7,881,000 | 7,767,000 | 7,634,480 | 7,530,620 | 7,125,940 | 7,036,000 | 7,065,370 | 7,163,670 | 7,549,340 | 7,654,320 | 7,681,440 | 7,659,180 | 7,527,060 |
| Inventory | US$ in thousands | 3,121,000 | 2,998,000 | 2,681,000 | 2,733,000 | 2,752,000 | 2,635,000 | 2,650,000 | 2,573,000 | 2,611,000 | 2,423,850 | 2,394,150 | 2,392,710 | 2,414,610 | 2,245,850 | 2,288,290 | 2,718,630 | 2,772,780 | 2,582,190 | 2,650,140 | 2,692,010 |
| Inventory turnover | 2.66 | 2.66 | 2.84 | 2.77 | 2.75 | 2.93 | 2.96 | 3.06 | 2.97 | 3.15 | 3.15 | 2.98 | 2.91 | 3.15 | 3.13 | 2.78 | 2.76 | 2.97 | 2.89 | 2.80 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $8,291,000K ÷ $3,121,000K
= 2.66
Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory levels by indicating how many times during a period inventory is sold and replaced. In the case of LKQ Corp, the inventory turnover ratio has been relatively stable over the past eight quarters, ranging from 2.66 to 3.06 times.
A consistent inventory turnover ratio indicates that LKQ Corp is effectively managing its inventory levels, striking a balance between holding too much or too little inventory. The slight fluctuations in the ratio over time may be indicative of changes in sales patterns or inventory management practices.
Overall, LKQ Corp's inventory turnover ratio suggests that the company is efficiently managing its inventory, which is important for controlling costs and optimizing working capital. However, it may be beneficial for the company to further analyze the reasons for the fluctuations in the ratio to ensure continued operational efficiency.