Trex Company Inc (TREX)
Inventory turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 818,832 | 813,260 | 764,908 | 781,577 | 844,083 | 955,562 | 1,024,217 | 985,016 | 921,775 | 818,369 | 755,158 | 683,171 | 647,396 | 595,810 | 560,774 | 562,236 | 557,348 | 546,552 | 534,325 | 524,701 |
| Inventory | US$ in thousands | 107,089 | 60,384 | 74,007 | 127,784 | 141,355 | 132,115 | 100,872 | 98,176 | 83,753 | 73,636 | 77,232 | 75,012 | 68,238 | 51,581 | 49,649 | 58,716 | 56,106 | 43,923 | 42,919 | 50,156 |
| Inventory turnover | 7.65 | 13.47 | 10.34 | 6.12 | 5.97 | 7.23 | 10.15 | 10.03 | 11.01 | 11.11 | 9.78 | 9.11 | 9.49 | 11.55 | 11.29 | 9.58 | 9.93 | 12.44 | 12.45 | 10.46 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $818,832K ÷ $107,089K
= 7.65
Inventory turnover is a crucial financial ratio that indicates how efficiently a company is managing its inventory levels. TREX Co., Inc.'s inventory turnover has fluctuated over the past eight quarters, ranging from a low of 4.97 in Q4 2022 to a high of 10.66 in Q3 2023.
A higher inventory turnover ratio generally indicates that TREX Co., Inc. is selling its inventory more quickly, which can be a positive sign of efficient operations. In contrast, a lower turnover ratio may suggest slower sales or excess inventory, potentially leading to storage or holding costs.
The significant increase in inventory turnover from 4.97 in Q4 2022 to 10.66 in Q3 2023 is notable and may indicate improvements in inventory management, sales performance, or demand for TREX Co., Inc.'s products during that period.
Analyzing trends in inventory turnover over time can provide valuable insights into a company's operational efficiency, liquidity, and overall financial health. It is essential for TREX Co., Inc. to continuously monitor and optimize its inventory turnover ratio to ensure effective inventory management and sustainable business growth.
Peer comparison
Dec 31, 2023
Dec 31, 2023