Papa John's International Inc (PZZA)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	1,576,558	1,671,755	1,738,900	1,730,550	1,731,399	1,685,650	1,695,494	1,708,270	1,724,902	1,722,059	1,698,506	1,676,322	1,639,099	1,597,133	1,571,502	1,536,590	1,469,034	1,424,965	1,377,108	1,291,170
Inventory	US$ in thousands	35,245	36,488	37,656	38,073	36,126	37,666	37,515	37,112	41,382	42,448	38,076	38,992	34,981	33,490	29,843	27,552	30,265	28,702	32,546	29,810
Inventory turnover		44.73	45.82	46.18	45.45	47.93	44.75	45.20	46.03	41.68	40.57	44.61	42.99	46.86	47.69	52.66	55.77	48.54	49.65	42.31	43.31

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,576,558K ÷ $35,245K
= 44.73

Inventory turnover is a key financial ratio that measures the efficiency of a company in managing its inventory. It indicates how many times during a specific period, typically a year, a company sells and replaces its inventory.

Based on the provided data for Papa John's International Inc, the inventory turnover ratio fluctuates over the observed periods, ranging from a low of 40.57 to a high of 55.77. Generally, a higher inventory turnover ratio indicates that the company is selling its inventory more frequently and efficiently.

Analyzing the trend over the periods, we can see that the inventory turnover ratio experienced fluctuations, with some quarters showing higher turnover ratios than others. For example, in the first quarter of 2021, the ratio peaked at 55.77, suggesting that the company was effectively managing its inventory and quickly selling its products. However, in the third quarter of 2022, the ratio decreased to 40.57, indicating a slower rate of inventory turnover during that period.

Overall, the inventory turnover ratio for Papa John's International Inc shows variability over time, which could be influenced by factors such as seasonality, product demand, and inventory management practices. Maintaining a balance between having enough inventory to meet demand and avoiding excess or obsolete inventory is crucial for optimizing the inventory turnover ratio and maximizing profitability.