United Rentals Inc (URI)

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	8,519,000	8,161,000	7,666,000	7,158,000	6,646,000	6,453,000	6,261,000	6,052,000	5,863,000	5,658,000	5,466,000	5,292,000	5,347,000	5,428,000	5,582,000	5,723,000	5,681,000	5,498,000	5,221,000	4,951,000
Inventory	US$ in thousands	205,000	201,000	210,000	222,000	232,000	193,000	199,000	179,000	164,000	166,000	174,000	114,000	125,000	108,000	107,000	115,000	120,000	130,000	135,000	123,000
Inventory turnover		41.56	40.60	36.50	32.24	28.65	33.44	31.46	33.81	35.75	34.08	31.41	46.42	42.78	50.26	52.17	49.77	47.34	42.29	38.67	40.25

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $8,519,000K ÷ $205,000K
= 41.56

The inventory turnover ratio measures the efficiency of a company in managing its inventory. It indicates how many times during a specific period the company sells and replaces its inventory. A higher turnover ratio is generally preferable as it suggests that the company is selling inventory quickly.

Analyzing United Rentals, Inc.'s inventory turnover from December 31, 2022, to December 31, 2023, shows a positive trend, with the ratio increasing from 20.66 to 30.09. This indicates that the company is managing its inventory more effectively and selling its products at a faster pace.

The peak turnover ratio of 30.09 on December 31, 2023, may indicate a more efficient use of inventory or a comprehensive strategy to clear excess inventory. Further analysis should be conducted to determine the specific factors contributing to this significant increase in inventory turnover. Overall, the positive trend in inventory turnover reflects a potentially more streamlined and efficient inventory management process at United Rentals, Inc.

It is important to note that inventory turnover should be analyzed in conjunction with other financial metrics and industry benchmarks to gain a comprehensive understanding of the company's operational efficiency and performance.