Air Products and Chemicals Inc (APD)

Inventory turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	10,103,400	10,396,500	8,080,800	5,858,100	6,004,500
Inventory	US$ in thousands	651,800	514,200	453,900	404,800	388,300
Inventory turnover		15.50	20.22	17.80	14.47	15.46

September 30, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $10,103,400K ÷ $651,800K
= 15.50

The inventory turnover ratio measures the efficiency of a company's inventory management by indicating how many times the company's inventory was sold and replaced over a specific period. In the case of Air Products & Chemicals Inc., the inventory turnover ratio has exhibited some fluctuations over the past five years, ranging from 13.55 to 18.16.

The declining trend in inventory turnover from 18.16 in 2022 to 13.55 in 2023 may suggest a decrease in the speed at which the company is selling its inventory or managing its stock levels. This could be indicative of potential issues such as overstocking, slowing sales, or ineffective inventory management.

However, it is important to consider the nature of the industry and the company's business model when interpreting this ratio, as a lower inventory turnover may be a deliberate strategy in certain circumstances. Overall, further investigation into the reasons behind the fluctuations in the inventory turnover ratio would provide a more comprehensive analysis of Air Products & Chemicals Inc.'s inventory management efficiency.