Trex Company Inc (TREX)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 846,176 | 819,033 | 844,285 | 921,976 | 647,596 |
| Inventory | US$ in thousands | 207,282 | 107,089 | 141,355 | 83,753 | 68,238 |
| Inventory turnover | 4.08 | 7.65 | 5.97 | 11.01 | 9.49 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $846,176K ÷ $207,282K
= 4.08
The inventory turnover ratio for Trex Company Inc has shown fluctuations over the years. In 2020, the company had an inventory turnover of 9.49 times, indicating that its inventory was sold and replaced nearly 9.49 times during the year. The ratio increased to 11.01 in 2021, suggesting a more efficient management of inventory.
However, there was a significant decline in 2022, where the inventory turnover ratio dropped to 5.97, signaling a decrease in the company's ability to sell and replace inventory quickly. This could potentially lead to excess inventory levels or slow-moving stock.
In 2023, the ratio slightly improved to 7.65, but it still remained lower than the levels seen in 2020 and 2021. This implies that Trex Company Inc may still be facing challenges in effectively managing its inventory levels.
The most concerning trend was observed in 2024, with a sharp decrease in inventory turnover to 4.08. This indicates a substantial decrease in the company's ability to efficiently sell and restock inventory, potentially leading to liquidity and profitability issues.
Overall, the analysis of Trex Company Inc's inventory turnover reveals fluctuations in the efficiency of managing its inventory levels over the years, with a downward trend raising potential concerns about the company's operational performance and financial health.
Peer comparison
Dec 31, 2024