CNH Industrial N.V. (CNH)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 16,838,000 | 16,797,000 | 14,109,000 | 11,152,000 | 21,832,000 |
| Inventory | US$ in thousands | 5,545,000 | 4,811,000 | 4,216,000 | 6,022,000 | 7,082,000 |
| Inventory turnover | 3.04 | 3.49 | 3.35 | 1.85 | 3.08 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $16,838,000K ÷ $5,545,000K
= 3.04
The inventory turnover ratio for CNH Industrial N.V. has fluctuated over the past five years. In 2023, the company's inventory turnover ratio was 3.04, slightly lower than the previous year's ratio of 3.49. This indicates that, on average, the company sold and replaced its inventory approximately 3.04 times during the year.
Comparing this to earlier years, we see a downward trend from 2019 to 2020, where the ratio was 3.08, followed by an increase in 2021 to 3.35. However, in 2022, the ratio peaked at 3.49 before declining again in 2023.
A higher inventory turnover ratio generally indicates that the company is efficiently managing its inventory by quickly converting it into sales. A lower ratio could indicate overstocking, slow-moving inventory, or potential inefficiencies in the company's operations. It is important for CNH Industrial N.V. to further analyze the reasons behind the fluctuations in its inventory turnover ratio to optimize its inventory management practices and improve its overall operational efficiency.
Peer comparison
Dec 31, 2023