Vulcan Materials Company (VMC)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 5,418,100 | 5,833,400 | 5,757,500 | 4,178,800 | 3,575,340 |
| Inventory | US$ in thousands | 681,800 | 615,600 | 579,300 | 521,300 | 448,585 |
| Inventory turnover | 7.95 | 9.48 | 9.94 | 8.02 | 7.97 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $5,418,100K ÷ $681,800K
= 7.95
Vulcan Materials Company's inventory turnover has shown a fluctuating trend over the years based on the provided data. The inventory turnover ratio measures how efficiently the company is managing its inventory by indicating how many times during a period it has sold and replaced its inventory.
In 2020, the inventory turnover stood at 7.97, indicating that Vulcan Materials Company turned over its inventory approximately 7.97 times during that year. The ratio increased slightly to 8.02 by the end of 2021, suggesting a marginal improvement in inventory management efficiency.
A more significant improvement was observed in 2022, with the inventory turnover reaching 9.94. This indicates that the company was able to sell and replace its inventory almost 10 times during that year, reflecting a more efficient management of inventory levels.
However, the inventory turnover ratio decreased in 2023 to 9.48, although it still remained relatively high. The slight decline could be attributed to various factors such as changes in sales strategies or inventory management practices.
By the end of 2024, the inventory turnover ratio decreased to 7.95, showing a reversal from the increasing trend observed in the previous years. A lower inventory turnover ratio might imply that the company is holding onto its inventory for a longer period, which could potentially tie up working capital and impact profitability.
Overall, while Vulcan Materials Company has shown fluctuations in its inventory turnover ratio over the years, it is essential for the company to continue monitoring and improving its inventory management practices to ensure optimal efficiency in its operations.
Peer comparison
Dec 31, 2024