Waste Management Inc (WM)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 15,071,000 | 14,524,000 | 13,245,000 | 11,356,000 | 11,379,000 |
| Inventory | US$ in thousands | 173,000 | 164,000 | 135,000 | 124,000 | 106,000 |
| Inventory turnover | 87.12 | 88.56 | 98.11 | 91.58 | 107.35 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $15,071,000K ÷ $173,000K
= 87.12
Inventory turnover is a measure of how efficiently a company manages its inventory levels by assessing how many times it sells and replaces its inventory during a specific period.
Looking at Waste Management, Inc.'s inventory turnover over the past five years, we can observe a generally consistent trend of high turnover ratios. The company's inventory turnover ratios ranged from 72.87 to 89.58 during this period, indicating that Waste Management has been effectively managing its inventory levels and converting its inventory into sales quickly.
A high inventory turnover ratio signifies that Waste Management is efficiently selling its products, which can help prevent the company from holding excess inventory that could become obsolete or lead to storage costs. Conversely, a low ratio may indicate overstocking, poor sales, or issues with inventory management.
Overall, Waste Management, Inc.'s consistently high inventory turnover ratios suggest strong efficiency in inventory management and a proactive approach to optimizing working capital and cash flow.
Peer comparison
Dec 31, 2023