NewMarket Corporation (NEU)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	1,900,212	1,919,475	1,903,813	1,901,532	1,925,906	1,962,690	2,044,987	2,121,658	2,124,302	2,091,127	2,027,371	1,910,930	1,808,403	1,715,571	1,577,847	1,442,251	1,415,899	1,429,903	1,476,731	1,555,189
Inventory	US$ in thousands	505,426	534,462	492,638	493,554	456,234	503,411	537,380	566,136	631,383	592,222	530,186	524,091	498,539	479,039	457,957	414,737	401,031	370,104	354,821	371,002
Inventory turnover		3.76	3.59	3.86	3.85	4.22	3.90	3.81	3.75	3.36	3.53	3.82	3.65	3.63	3.58	3.45	3.48	3.53	3.86	4.16	4.19

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,900,212K ÷ $505,426K
= 3.76

NewMarket Corporation's inventory turnover has fluctuated over the past few years, ranging from a low of 3.48 in March 2021 to a high of 4.22 in December 2023. The inventory turnover ratio measures how efficiently the company is managing its inventory by indicating how many times the inventory is sold and replaced within a specific period.

A higher inventory turnover ratio typically indicates that the company is selling goods quickly and efficiently, which can lead to better cash flow and profitability. Conversely, a lower ratio may imply that the company is holding onto excess inventory, which could tie up working capital and increase holding costs.

NewMarket Corporation's inventory turnover has shown some variations, but generally, it has remained within the range of 3.48 to 4.22 over the analyzed period. It is essential for the company to monitor and manage its inventory effectively to ensure optimal use of resources and maintain a healthy balance between supply and demand. Additionally, a consistent and stable inventory turnover ratio can be a positive indicator of the company's overall operational efficiency and financial health.