Marathon Petroleum Corp (MPC)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	126,240,000	128,566,000	151,671,000	110,008,000	65,733,000
Inventory	US$ in thousands	9,568,000	9,317,000	8,827,000	8,055,000	7,999,000
Inventory turnover		13.19	13.80	17.18	13.66	8.22

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $126,240,000K ÷ $9,568,000K
= 13.19

To analyze Marathon Petroleum Corp's inventory turnover, we look at how efficiently the company is managing its inventory. The inventory turnover ratio is calculated by dividing the cost of goods sold by the average inventory for a specific period.

From the data provided:
- December 31, 2020: Inventory turnover of 8.22
- December 31, 2021: Inventory turnover of 13.66
- December 31, 2022: Inventory turnover of 17.18
- December 31, 2023: Inventory turnover of 13.80
- December 31, 2024: Inventory turnover of 13.19

The trend in the inventory turnover ratio indicates an improvement in the efficiency of managing inventory over the years. The ratio has increased significantly from 8.22 in 2020 to a peak of 17.18 in 2022, showcasing a more rapid turnover of inventory. However, there was a slight dip in 2023 and 2024, but the ratios remained relatively high compared to the initial year.

A higher inventory turnover ratio generally indicates that the company is selling its inventory quickly, minimizing storage costs, and reducing the risk of obsolete inventory. This trend suggests that Marathon Petroleum Corp has been effectively managing its inventory levels and improving operational efficiency in recent years.