Xpel Inc (XPEL)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 334,380 | 274,457 | 221,648 | 136,510 | 113,693 |
| Inventory | US$ in thousands | 106,509 | 80,575 | 51,936 | 22,364 | 15,141 |
| Inventory turnover | 3.14 | 3.41 | 4.27 | 6.10 | 7.51 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $334,380K ÷ $106,509K
= 3.14
XPEL Inc's inventory turnover has exhibited a decreasing trend over the past five years, declining from 5.71 in 2019 to 2.20 in 2023. This indicates that the company is selling its inventory at a slower rate relative to its cost of goods sold. A lower inventory turnover may suggest potential issues such as overstocking, obsolete inventory, or lower demand for the company's products. It can also indicate inefficiencies in inventory management and procurement processes.
The declining trend in inventory turnover could potentially lead to increased carrying costs and liquidity challenges for XPEL Inc. Management should closely monitor and analyze the underlying reasons for the decreasing inventory turnover, and take steps to improve inventory management practices and optimize the use of working capital. Additionally, a lower inventory turnover ratio may also impact the company's profitability and overall financial performance.