Smith AO Corporation (AOS)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,131,600 | 3,126,800 | 3,108,000 | 2,941,700 | 2,469,600 |
| Inventory | US$ in thousands | 532,100 | 497,400 | 516,400 | 447,700 | 300,100 |
| Inventory turnover | 5.89 | 6.29 | 6.02 | 6.57 | 8.23 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,131,600K ÷ $532,100K
= 5.89
To analyze Smith AO Corporation's inventory turnover, we observe a declining trend over the five-year period from December 31, 2020, to December 31, 2024. The inventory turnover ratio has decreased from 8.23 in 2020 to 5.89 in 2024. This indicates that the company is taking longer to sell its inventory.
A decreasing inventory turnover ratio could suggest potential issues such as overstocking, slow-moving inventory, or inefficiencies in inventory management. It may also point towards changing customer demand or pricing strategies affecting sales velocity.
Further investigation into the reasons behind the decline in inventory turnover is warranted to identify potential areas for improvement in inventory control and management practices within Smith AO Corporation.
Peer comparison
Dec 31, 2024