Simpson Manufacturing Company Inc (SSD)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,665,630 | 1,590,040 | 1,153,090 | 972,071 | 920,623 |
| Inventory | US$ in thousands | 551,575 | 556,801 | 443,756 | 283,742 | 251,907 |
| Inventory turnover | 3.02 | 2.86 | 2.60 | 3.43 | 3.65 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,665,630K ÷ $551,575K
= 3.02
Simpson Manufacturing Co., Inc.'s inventory turnover ratio has shown some fluctuations in recent years. The ratio indicates how efficiently the company manages its inventory. A higher turnover ratio suggests that inventory is selling quickly, which is generally favorable as it reduces holding costs and potential obsolescence.
In 2023, the inventory turnover ratio slightly increased to 2.12 from 2.11 in 2022, indicating a modest improvement in inventory management efficiency. However, compared to 2021, where the ratio was 1.84, the company has shown a more efficient use of inventory in 2023.
The inventory turnover ratio was highest in 2020 at 2.44 and then decreased in 2021. Despite the fluctuations, the company has generally maintained a turnover ratio above 2 in recent years, suggesting a reasonable level of inventory management efficiency overall.
It is important for Simpson Manufacturing Co., Inc. to monitor its inventory turnover ratio consistently to ensure optimal inventory management practices and maintain a balance between having enough inventory to meet demand and avoiding excess or obsolete inventory.
Peer comparison
Dec 31, 2023