Paycom Soft (PAYC)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	334,600	276,290	212,741	161,886	123,546
Inventory	US$ in thousands	1,400	1,383	1,607	1,131	1,151
Inventory turnover		239.00	199.78	132.38	143.14	107.34

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $334,600K ÷ $1,400K
= 239.00

The inventory turnover ratio of Paycom Soft has shown a consistent upward trend over the past five years, reflecting efficient management of inventory. As of December 31, 2020, the inventory turnover was 107.34, indicating that the company sold and replaced its inventory approximately 107 times during that year. This ratio increased to 143.14 by December 31, 2021, and further improved to 132.38 by December 31, 2022.

Notably, the inventory turnover ratio experienced a significant surge to 199.78 by December 31, 2023, and continued to increase to 239.00 by December 31, 2024. These high inventory turnover numbers suggest that Paycom Soft has been effectively managing its inventory levels, minimizing carrying costs, and swiftly converting inventory into sales.

Overall, the consistent increase in the inventory turnover ratio indicates that Paycom Soft has been efficient in managing its inventory throughout the years, improving its liquidity and profitability by optimizing inventory control and turnover.