Walgreens Boots Alliance Inc (WBA)
Inventory turnover
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 149,818,000 | 134,560,000 | 130,222,000 | 141,859,000 | 132,887,000 |
| Inventory | US$ in thousands | 8,257,000 | 8,353,000 | 8,159,000 | 7,917,000 | 9,333,000 |
| Inventory turnover | 18.14 | 16.11 | 15.96 | 17.92 | 14.24 |
August 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $149,818,000K ÷ $8,257,000K
= 18.14
Inventory turnover is a key financial ratio that measures the efficiency of a company in managing its inventory. A higher inventory turnover generally indicates that the company is selling its inventory quickly, which is favorable as it reduces the risk of obsolescence and holding costs.
Looking at the inventory turnover of Walgreens Boots Alliance Inc over the past five years, we can see a positive trend. The company's inventory turnover has steadily increased from 11.44 in 2019 to 13.57 in 2023. This indicates that the company has been improving its efficiency in managing and selling inventory over the years.
A high inventory turnover implies that Walgreens Boots Alliance Inc is effectively managing its inventory levels and is able to quickly sell its products. This is a positive sign as it suggests that the company is able to generate revenue from its inventory at a faster rate.
It is important to note that a significantly high inventory turnover ratio may also suggest that the company may be understocked, which could potentially lead to missed sales opportunities. However, in the case of Walgreens Boots Alliance Inc, the increase in inventory turnover over the years indicates that the company has been able to strike a good balance between managing inventory levels and maximizing sales.
Overall, the increasing trend in Walgreens Boots Alliance Inc's inventory turnover ratio demonstrates the company's ability to efficiently manage its inventory, optimize sales, and indicates a positive trend in its operational efficiency.
Peer comparison
Aug 31, 2023