Treehouse Foods Inc (THS)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,855,500 | 2,774,700 | 2,479,200 | 2,449,600 | 3,492,100 |
| Inventory | US$ in thousands | 534,000 | 554,000 | 461,600 | 598,600 | 544,000 |
| Inventory turnover | 5.35 | 5.01 | 5.37 | 4.09 | 6.42 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,855,500K ÷ $534,000K
= 5.35
Treehouse Foods Inc's inventory turnover has shown a fluctuating trend over the past five years. The company's inventory turnover ratio was 6.42 in 2019, which decreased to 5.93 in 2020, before increasing to 5.35 in 2021. It then remained at 5.35 in 2023, slightly improving from 4.99 in 2022.
A higher inventory turnover ratio indicates that the company is selling its inventory more frequently within a given period, which can be considered positive as it implies efficient inventory management. However, a declining trend in the inventory turnover ratio may suggest potential issues such as overstocking, slow sales, or inefficient inventory management practices.
In the case of Treehouse Foods Inc, the recent improvement in the inventory turnover ratio in 2023 compared to 2022 is a positive sign, indicating that the company may have optimized its inventory levels and sales processes during the period. Further analysis and comparison with industry benchmarks would provide more insights into the company's inventory management efficiency and operational performance.
Peer comparison
Dec 31, 2023