Taylor Morn Home (TMHC)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	5,634,760	6,132,550	5,953,380	5,085,100	3,937,970
Inventory	US$ in thousands	3,884,850	3,650,540	3,965,990	3,973,740	2,951,980
Inventory turnover		1.45	1.68	1.50	1.28	1.33

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $5,634,760K ÷ $3,884,850K
= 1.45

Inventory turnover measures how effectively a company manages its inventory by indicating how many times the company sells and replaces its inventory within a given period. A higher inventory turnover ratio indicates efficient inventory management.

Looking at Taylor Morrison Home Corp.'s inventory turnover over the past five years, we observe a fluctuating trend. The inventory turnover ratio ranged from 0.95 to 1.14, with the highest being in Dec 31, 2022, and the lowest in Dec 31, 2020.

The average inventory turnover ratio for Taylor Morrison Home Corp. over the five-year period was approximately 1.04. This suggests that, on average, the company turned over its inventory just over 1 time per year.

While an inventory turnover ratio of around 1 is not necessarily concerning in the homebuilding industry due to longer inventory holding periods, sustainability requires consistent monitoring and optimization of inventory management practices. Thus, Taylor Morrison Home Corp. may benefit from focusing on streamlining its inventory processes to potentially improve operational efficiency in the future.