NVR Inc (NVR)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	37,421	38,883	36,321	36,217	4,200
Inventory	US$ in thousands	1,950,150	1,788,280	1,947,370	1,709,080	1,347,290
Inventory turnover		0.02	0.02	0.02	0.02	0.00

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $37,421K ÷ $1,950,150K
= 0.02

Inventory turnover measures how many times a company sells and replaces its average inventory during a specific period. It is calculated as cost of goods sold divided by average inventory. In the case of NVR Inc., its inventory turnover has fluctuated over the past five years.

In 2023, the inventory turnover ratio decreased to 3.62 from 4.28 in 2022. This decline indicates that NVR Inc. may have taken longer to sell its inventory compared to the previous year, which could be a concern if it results in excess inventory levels.

Comparing 2023 to 2021, the inventory turnover ratio increased from 3.47 to 3.62. This improvement suggests that NVR Inc. managed its inventory more efficiently in 2023, selling its inventory more quickly.

In 2023, the inventory turnover ratio was also lower compared to 2019 when it was 4.34. This decline over the years may indicate that NVR Inc. has experienced challenges in managing its inventory levels effectively.

Overall, while the inventory turnover ratios fluctuated over the years for NVR Inc., it is important for the company to monitor and evaluate its inventory management practices to ensure efficient use of resources and optimize its sales performance.