Paycom Soft (PAYC)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	276,290	260,672	246,835	229,489	212,741	200,193	187,769	174,097	161,886	148,393	136,625	129,773	123,546	119,314	114,794	110,475	109,747	105,051	100,784	96,476
Inventory	US$ in thousands	1,383	836	874	887	1,607	1,471	1,647	732	1,131	866	882	1,088	1,151	924	1,376	930	1,158	700	767	910
Inventory turnover		199.78	311.81	282.42	258.72	132.38	136.09	114.01	237.84	143.14	171.35	154.90	119.28	107.34	129.13	83.43	118.79	94.77	150.07	131.40	106.02

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $276,290K ÷ $1,383K
= 199.78

Paycom Software Inc's inventory turnover has seen fluctuations over the past eight quarters. The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times a company sells and replaces its inventory during a specific period.

In Q4 2023, Paycom's inventory turnover ratio was 161.75, which was significantly higher compared to the previous quarter (Q3 2023: 252.20). This sharp decrease could suggest a quicker turnover of inventory in Q4, potentially resulting from increased sales or more efficient inventory management practices.

Comparing the current period to the same quarter in the previous year, there has been a notable improvement in inventory turnover. Q4 2023's inventory turnover of 161.75 is substantially higher than that of Q4 2022 (105.67), indicating improvements in managing inventory levels and sales efficiency over the year.

The overall trend shows that Paycom Software Inc has been able to consistently improve its inventory turnover ratio over the past eight quarters, with occasional fluctuations in between. This upward trend reflects the company's ability to efficiently manage its inventory and convert it into sales.