Baker Hughes Co (BKR)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,098,000 | 3,226,000 | 3,445,000 | 2,868,000 | 19,958,000 |
| Inventory | US$ in thousands | 4,954,000 | 5,094,000 | 4,587,000 | 3,979,000 | 4,421,000 |
| Inventory turnover | 0.63 | 0.63 | 0.75 | 0.72 | 4.51 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,098,000K ÷ $4,954,000K
= 0.63
The inventory turnover ratio for Baker Hughes Co has shown a declining trend over the years, starting at 4.51 in December 31, 2020, and gradually decreasing to 0.72 by December 31, 2021. This further dropped to 0.75 as of December 31, 2022, and remained relatively stable at 0.63 for both December 31, 2023, and December 31, 2024.
A decreasing inventory turnover ratio indicates that the company is selling its inventory at a slower rate compared to previous years. This can suggest potential issues such as overstocking, obsolete inventory, or difficulty in selling products. It may also point to inefficiencies in inventory management and sales strategies.
Baker Hughes Co may need to review its inventory management practices, implement better forecasting techniques, and possibly reassess its sales and marketing strategies to improve inventory turnover and optimize working capital utilization.
Peer comparison
Dec 31, 2024