Colgate-Palmolive Company (CL)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	7,940,000	8,131,000	7,719,000	7,046,000	6,454,000
Inventory	US$ in thousands	1,987,000	1,934,000	2,074,000	1,692,000	1,673,000
Inventory turnover		4.00	4.20	3.72	4.16	3.86

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $7,940,000K ÷ $1,987,000K
= 4.00

Colgate-Palmolive Company's inventory turnover has shown fluctuations over the past five years. The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times in a year the inventory is sold and replaced.

In 2020, the inventory turnover ratio was 3.86, which increased to 4.16 by the end of 2021, suggesting an improvement in inventory management efficiency. However, by the end of 2022, the ratio decreased to 3.72, indicating a potential slowdown in inventory turnover.

The following years saw a positive trend, with the inventory turnover increasing to 4.20 in 2023 and then remaining relatively stable at 4.00 in 2024. These figures indicate that Colgate-Palmolive Company has effectively managed its inventory turnover, with the ratio consistently above 4 in the latter years, which generally signifies efficient inventory management.

Overall, the trend in Colgate-Palmolive Company's inventory turnover ratio suggests that the company has been able to effectively control its inventory levels and optimize its operations to ensure a healthy turnover rate, which is essential for maintaining optimal cash flow and profitability.