Pool Corporation (POOL)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,881,550 | 4,246,320 | 3,678,490 | 2,805,720 | 2,274,590 |
| Inventory | US$ in thousands | 1,365,470 | 1,591,060 | 1,339,100 | 780,989 | 702,274 |
| Inventory turnover | 2.84 | 2.67 | 2.75 | 3.59 | 3.24 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,881,550K ÷ $1,365,470K
= 2.84
Pool Corporation's inventory turnover has fluctuated over the past five years, ranging from a low of 2.67 in 2022 to a high of 3.59 in 2020. The inventory turnover ratio indicates how efficiently the company is managing its inventory by measuring the number of times a company sells and replaces its average inventory during a specific period.
A higher inventory turnover ratio suggests that the company is selling its inventory quickly and efficiently, while a lower ratio may indicate slow-moving inventory or overstocking. Pool Corporation's inventory turnover has generally been in the range of 2.67 to 3.59, which is relatively stable.
The decrease in inventory turnover in 2022 compared to 2021 suggests that the company may have been holding on to inventory for a longer period before selling it. However, the increase in 2023 indicates an improvement in managing inventory turnover. Overall, Pool Corporation should continue to monitor its inventory turnover ratio to ensure optimal management of its inventory levels.