Patrick Industries Inc (PATK)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	2,879,790	2,685,810	3,821,930	3,276,900	2,027,580
Inventory	US$ in thousands	551,617	510,133	667,841	614,356	312,809
Inventory turnover		5.22	5.26	5.72	5.33	6.48

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $2,879,790K ÷ $551,617K
= 5.22

Based on the inventory turnover data provided for Patrick Industries Inc from December 31, 2020, to December 31, 2024, we observe a fluctuation in the company's efficiency in managing its inventory levels.

The inventory turnover ratio indicates how many times a company sells and replaces its inventory within a given period. A higher inventory turnover ratio is generally seen as a positive indicator of efficiency in inventory management.

From December 31, 2020, to December 31, 2021, the inventory turnover ratio decreased from 6.48 to 5.33. This decline suggests that the company took longer to sell and replace its inventory during this period, indicating potential inefficiencies or a slower turnover of inventory.

However, from December 31, 2021, to December 31, 2022, there was a slight improvement in the inventory turnover ratio, increasing to 5.72. This uptick may indicate better inventory management practices or increased sales velocity.

Subsequently, the inventory turnover ratio decreased again to 5.26 by December 31, 2023, and further declined to 5.22 by December 31, 2024. These declines suggest a continuation of the trend of slower inventory turnover, potentially pointing to challenges in managing inventory levels efficiently or changes in sales patterns.

Overall, while the inventory turnover ratios for Patrick Industries Inc fluctuated over the years, it is important for the company to continuously monitor and optimize its inventory management processes to ensure efficient operations and maximize profitability.