Tesla Inc (TSLA)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	79,113,000	60,609,000	40,217,000	24,906,000	20,509,000
Inventory	US$ in thousands	13,626,000	12,839,000	5,757,000	4,101,000	3,552,000
Inventory turnover		5.81	4.72	6.99	6.07	5.77

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $79,113,000K ÷ $13,626,000K
= 5.81

To analyze Tesla Inc's inventory turnover, we calculated the inventory turnover ratio for the years ending December 31, 2019 through December 31, 2023. The inventory turnover ratio is a measure of how efficiently a company manages its inventory by comparing the cost of goods sold to the average inventory during a specific period.

The inventory turnover ratios for the aforementioned years were 5.77, 6.07, 6.99, 4.72, and 5.81, respectively. These figures indicate that Tesla's inventory turnover has fluctuated over the years, which might suggest varying degrees of efficiency in managing inventory levels.

A higher inventory turnover ratio generally indicates that the company is selling its inventory stock more frequently, which may be a positive sign of efficient inventory management and a shorter cash-to-cash cycle. Conversely, a lower ratio may imply slower inventory turnover and potential issues related to holding excessive inventory levels.

The increase in inventory turnover from 2022 to 2023 could suggest improved inventory management, as the company is selling its inventory at a faster rate compared to the previous year. However, the decrease in the ratio from 2021 to 2022 and the lower ratio in 2020 may indicate challenges in managing inventory efficiency during those periods.

Overall, the trend in Tesla's inventory turnover ratios suggests fluctuations in the company's ability to efficiently manage its inventory levels, which could have implications for its working capital management and operational efficiency. It's important to consider additional factors such as industry norms and company-specific dynamics when interpreting these ratios in isolation.