BorgWarner Inc (BWA)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	14,629,000	15,141,000	15,438,000	14,811,000	14,505,000	13,636,000	13,110,000	13,034,000	13,275,000	14,198,000	13,288,000	11,367,000	9,417,000	7,574,000	7,303,000	7,852,000	8,067,000	8,083,000	8,078,000	8,154,000
Inventory	US$ in thousands	1,313,000	1,328,000	1,860,000	1,800,000	1,217,000	1,658,000	1,653,000	1,644,000	1,534,000	1,649,000	1,567,000	1,361,000	1,286,000	815,000	836,000	847,000	807,000	810,000	817,000	807,000
Inventory turnover		11.14	11.40	8.30	8.23	11.92	8.22	7.93	7.93	8.65	8.61	8.48	8.35	7.32	9.29	8.74	9.27	10.00	9.98	9.89	10.10

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $14,629,000K ÷ $1,313,000K
= 11.14

Inventory turnover is a financial ratio that measures how efficiently a company is managing its inventory. The formula for inventory turnover is cost of goods sold divided by average inventory. A higher inventory turnover ratio indicates that the company is selling its inventory quickly and efficiently.

Analyzing the inventory turnover ratios for BorgWarner Inc over the past eight quarters, we can see some fluctuations in the ratios. There is a general trend of the ratio being around 7 to 8 times, with some quarters showing slightly higher ratios.

In Q4 2023, the inventory turnover ratio was 8.86, which indicates that BorgWarner Inc was able to sell its inventory almost 9 times during that quarter. This is a positive sign as it shows efficient inventory management. In comparison, in Q3 2023 and Q4 2022, the inventory turnover ratios were also high at 10.04 and 7.53 respectively, indicating similar efficiency in managing inventory.

However, there are quarters like Q2 2023 and Q2 2022 where the inventory turnover ratios dropped to 7.32 and 7.24 respectively. While still respectable ratios, these lower numbers may indicate that BorgWarner Inc was not able to sell its inventory as quickly during those periods.

Overall, BorgWarner Inc seems to maintain a relatively stable inventory turnover ratio, indicating efficient inventory management practices. It is essential for the company to monitor this ratio consistently to ensure optimal inventory levels and good financial health.