Vulcan Materials Company (VMC)

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	5,833,500	5,853,400	5,854,000	5,832,500	5,757,400	5,630,000	5,157,000	4,611,500	4,178,600	3,796,378	3,603,370	3,566,826	3,575,345	3,596,038	3,684,766	3,715,890	3,673,207	3,592,898	3,471,833	3,391,620
Inventory	US$ in thousands	615,600	570,600	594,600	585,600	579,300	542,000	524,200	524,500	521,300	512,200	450,600	441,400	448,600	455,461	451,480	470,747	458,308	429,660	441,423	429,397
Inventory turnover		9.48	10.26	9.85	9.96	9.94	10.39	9.84	8.79	8.02	7.41	8.00	8.08	7.97	7.90	8.16	7.89	8.01	8.36	7.87	7.90

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $5,833,500K ÷ $615,600K
= 9.48

Vulcan Materials Co's inventory turnover has shown consistency over the past eight quarters, ranging from 8.79 to 10.39. The turnover ratio indicates the number of times the company's inventory is sold and replaced within a specific period. A higher inventory turnover ratio signifies efficient inventory management and rapid sales conversion, while a lower ratio may indicate overstocking or slow sales.

In this case, Vulcan Materials Co's inventory turnover has generally been healthy, staying above 9 in most quarters. This suggests that the company efficiently manages its inventory levels, ensuring that stock is sold and replenished promptly. The slight fluctuations in the ratio are normal and may be influenced by various factors such as seasonality, demand fluctuations, or changes in production and sales strategies.

Overall, a consistent inventory turnover ratio above 9 indicates that Vulcan Materials Co is effectively managing its inventory, which can lead to improved cash flow, lower carrying costs, and better overall financial performance. Monitoring and analyzing this ratio regularly can help stakeholders assess the company's operational efficiency and potential risks related to inventory management.