Verizon Communications Inc (VZ)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	53,438,000	57,919,000	45,169,000	41,288,000	48,939,000
Inventory	US$ in thousands	2,247,000	2,057,000	2,388,000	3,055,000	1,796,000
Inventory turnover		23.78	28.16	18.91	13.51	27.25

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $53,438,000K ÷ $2,247,000K
= 23.78

Verizon Communications Inc's inventory turnover has shown fluctuations over the past five years. In 2020, the inventory turnover ratio was at 27.25, indicating that the company's inventory was turning over approximately 27 times during the year. This is considered a very high turnover rate, suggesting efficient inventory management.

However, in 2021, the inventory turnover ratio decreased to 13.51, possibly indicating a slower rate at which Verizon was selling its inventory. This could be a concern as it may imply excess inventory levels or potential issues with sales and demand.

In 2022, the inventory turnover ratio improved to 18.91, signaling a more efficient use of inventory compared to the previous year. Verizon may have implemented better inventory management strategies to achieve this improvement.

By 2023, the inventory turnover ratio increased further to 28.16, reaching levels even higher than in 2020. This suggests that Verizon had successfully optimized its inventory turnover, potentially reducing holding costs and improving cash flow.

In 2024, the inventory turnover ratio was at 23.78, remaining relatively high compared to 2021 and 2022 but slightly lower than the peak in 2023. Overall, Verizon's inventory turnover has exhibited reasonably strong performance, with fluctuations likely reflecting changes in business operations, market conditions, and inventory management practices over the years.