AptarGroup Inc (ATR)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 64,316 | 95,123 | 54,958 | 72,727 | 2,023,330 |
| Inventory | US$ in thousands | 461,807 | 513,053 | 486,806 | 441,464 | 379,379 |
| Inventory turnover | 0.14 | 0.19 | 0.11 | 0.16 | 5.33 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $64,316K ÷ $461,807K
= 0.14
Inventory turnover is a crucial financial ratio that sheds light on how efficiently a company manages its inventory. In the case of AptarGroup Inc, we observe a notable decline in inventory turnover over the period from 2020 to 2024. Specifically, the inventory turnover decreased from 5.33 in December 2020 to 0.14 in December 2024.
A high inventory turnover ratio typically indicates that a company is effectively selling its products and replenishing its inventory quickly. However, the significant drop in AptarGroup's inventory turnover may suggest inefficiencies in its inventory management. A decreasing inventory turnover could imply overstocking, slow-moving inventory, or challenges in sales and distribution.
It is imperative for AptarGroup Inc to address the declining trend in inventory turnover to prevent potential liquidity issues caused by tying up capital in excess inventory. Management may need to reassess their inventory management strategies, optimize production levels, streamline supply chains, and enhance demand forecasting to improve inventory turnover and overall operational efficiency.
Peer comparison
Dec 31, 2024