Colgate-Palmolive Company (CL)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	8,131,000	7,719,000	7,046,000	6,454,000	6,368,000
Inventory	US$ in thousands	1,934,000	2,074,000	1,692,000	1,673,000	1,400,000
Inventory turnover		4.20	3.72	4.16	3.86	4.55

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $8,131,000K ÷ $1,934,000K
= 4.20

Colgate-Palmolive Co.'s inventory turnover has fluctuated over the past five years, ranging from a low of 3.72 in 2022 to a high of 4.55 in 2019. The inventory turnover ratio measures how efficiently the company manages its inventory by indicating how many times it sells and replaces its inventory within a specific period.

In 2023, the inventory turnover ratio increased to 4.20 from 3.72 in the previous year, indicating that Colgate-Palmolive Co. was able to sell and replace its inventory more frequently. This could suggest improved inventory management practices, such as better forecasting of demand and tighter control over inventory levels.

On average, the inventory turnover ratio for the past five years was 4.10, showing that Colgate-Palmolive Co. generally maintained a healthy level of inventory turnover throughout this period. A higher inventory turnover ratio is generally preferred as it indicates efficient inventory management and less money tied up in inventory.

Overall, the increasing trend in inventory turnover is a positive sign for Colgate-Palmolive Co., suggesting that the company is effectively managing its inventory levels and translating them into sales more efficiently over time.