Allegion PLC (ALLE)
Inventory turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 2,103,700 | 2,086,900 | 2,066,500 | 2,039,800 | 2,069,300 | 2,068,000 | 2,099,100 | 2,046,600 | 1,949,500 | 1,861,400 | 1,732,200 | 1,700,500 | 1,662,500 | 1,647,200 | 1,639,900 | 1,556,400 | 1,541,100 | 1,534,000 | 1,537,600 | 1,605,200 |
| Inventory | US$ in thousands | 423,000 | 449,900 | 444,600 | 448,300 | 438,500 | 468,700 | 483,100 | 472,700 | 479,000 | 477,900 | 428,400 | 402,900 | 380,400 | 345,700 | 310,000 | 289,900 | 283,100 | 289,600 | 293,600 | 275,500 |
| Inventory turnover | 4.97 | 4.64 | 4.65 | 4.55 | 4.72 | 4.41 | 4.35 | 4.33 | 4.07 | 3.89 | 4.04 | 4.22 | 4.37 | 4.76 | 5.29 | 5.37 | 5.44 | 5.30 | 5.24 | 5.83 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,103,700K ÷ $423,000K
= 4.97
The inventory turnover ratio for Allegion PLC has displayed a declining trend over the analyzed period from March 31, 2020, to December 31, 2024. The ratio decreased from 5.83 in March 2020 to 4.97 in December 2024.
A high inventory turnover ratio indicates that the company is efficiently managing its inventory by quickly selling and replenishing stock. Conversely, a decreasing ratio may suggest potential issues with inventory management, such as overstocking, obsolete inventory, or changes in customer demand.
Allegion PLC's decreasing inventory turnover ratio could indicate that the company is holding onto inventory for a longer period, which may tie up working capital and increase holding costs. It is crucial for the company to analyze the underlying reasons for this trend and take appropriate actions to optimize inventory levels and turnover.
Further qualitative analysis, along with industry benchmarking and comparison with competitors, may provide additional insights into Allegion PLC's inventory management effectiveness and overall operational efficiency.