AGCO Corporation (AGCO)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 10,772,400 | 12,163,900 | 10,939,500 | 9,733,000 | 8,196,600 |
| Inventory | US$ in thousands | 2,731,300 | 3,440,700 | 3,189,700 | 2,593,700 | 1,974,400 |
| Inventory turnover | 3.94 | 3.54 | 3.43 | 3.75 | 4.15 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $10,772,400K ÷ $2,731,300K
= 3.94
AGCO Corporation's inventory turnover has shown a decreasing trend over the past five years. In 2020, the inventory turnover was at 4.15, indicating that the company's inventory turnover rate was relatively efficient at selling and replenishing its inventory. However, the ratio decreased to 3.75 in 2021, 3.43 in 2022, and 3.54 in 2023, suggesting a decline in the efficiency of managing and selling inventory.
Although there was a slight increase in 2024 with the inventory turnover ratio rising to 3.94, it is important to note that the overall trend is on a downward trajectory. A lower inventory turnover ratio can imply possible issues such as overstocking, slow-moving inventory, or challenges in accurately forecasting demand.
AGCO Corporation should closely monitor its inventory turnover and assess its inventory management practices to ensure optimal utilization of resources and maintain healthy liquidity levels. Engaging in efficient inventory management strategies can help enhance operational efficiency and improve overall financial performance.
Peer comparison
Dec 31, 2024