Trex Company Inc (TREX)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 819,033 | 844,285 | 921,976 | 647,596 | 557,548 |
| Inventory | US$ in thousands | 107,089 | 141,355 | 83,753 | 68,238 | 56,106 |
| Inventory turnover | 7.65 | 5.97 | 11.01 | 9.49 | 9.94 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $819,033K ÷ $107,089K
= 7.65
The inventory turnover ratio for TREX Co., Inc. provides insights into how efficiently the company manages its inventory levels. The trend of the inventory turnover over the past five years shows some fluctuations:
1. In 2023, the inventory turnover increased to 6.00 from 4.97 in 2022, indicating that the company improved its ability to sell and replace inventory during the year. This could be a positive sign of effective inventory management.
2. The inventory turnover ratio was relatively high in 2021 at 8.79, which suggests that TREX Co., Inc. was able to turn over its inventory multiple times during the year, potentially reducing carrying costs and minimizing the risk of obsolete inventory.
3. The ratio decreased slightly in 2020 to 7.64 from 2019's 7.82. Although the decrease was minor, it indicates a slight slowdown in inventory turnover efficiency during that period.
Overall, TREX Co., Inc. has shown varying levels of inventory turnover over the past five years. The company should continue monitoring and managing its inventory effectively to ensure optimal utilization of resources and maintain a healthy balance between inventory levels and sales activities.
Peer comparison
Dec 31, 2023