Pool Corporation (POOL)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,735,610 | 3,881,550 | 4,246,320 | 3,678,490 | 2,805,720 |
| Inventory | US$ in thousands | 1,289,300 | 1,365,470 | 1,591,060 | 1,339,100 | 780,989 |
| Inventory turnover | 2.90 | 2.84 | 2.67 | 2.75 | 3.59 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,735,610K ÷ $1,289,300K
= 2.90
The inventory turnover ratio for Pool Corporation has shown a gradual decline over the five-year period from December 31, 2020, to December 31, 2024. The ratio decreased from 3.59 in 2020 to 2.75 in 2021, further dropping to 2.67 in 2022, and then slightly improved to 2.84 in 2023 before reaching 2.90 in 2024.
A decreasing trend in inventory turnover may indicate inefficiencies in managing inventory levels or difficulties in selling products promptly. It suggests that the company is holding onto inventory for a longer period before being sold, which could tie up cash and increase holding costs.
Pool Corporation may need to assess its inventory management practices, such as optimizing ordering and stocking processes, to improve inventory turnover and enhance operational efficiency. Monitoring and addressing factors impacting inventory turnover can help the company better utilize its resources and maintain a healthier balance between inventory levels and sales turnover.