PACCAR Inc (PCAR)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	980,000	838,000	946,500	1,110,400	1,114,900
Inventory	US$ in thousands	2,576,700	2,198,800	1,976,000	1,221,900	1,153,200
Inventory turnover		0.38	0.38	0.48	0.91	0.97

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $980,000K ÷ $2,576,700K
= 0.38

Inventory turnover measures the efficiency with which Paccar Inc. manages its inventory levels and converts them into sales. The company's inventory turnover has been relatively stable over the past five years, ranging from 10.45 to 17.84.

A decreasing trend in inventory turnover could indicate slower sales relative to inventory levels, potentially signaling overstocking or declining demand. Conversely, an increasing trend suggests efficient management of inventory levels and quick turnover into sales.

Paccar Inc.'s inventory turnover of 10.45 in 2023 indicates that the company generated sales 10.45 times during the year relative to its average inventory level. This suggests that the company efficiently managed its inventory to drive sales, albeit slightly lower than in the previous year. The consistency in inventory turnover over the years reflects a stable inventory management strategy by Paccar Inc.