Donaldson Company Inc (DCI)
Inventory turnover
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,311,900 | 2,270,200 | 2,239,200 | 1,882,200 | 1,710,200 |
| Inventory | US$ in thousands | 476,700 | 418,100 | 502,400 | 384,500 | 322,700 |
| Inventory turnover | 4.85 | 5.43 | 4.46 | 4.90 | 5.30 |
July 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,311,900K ÷ $476,700K
= 4.85
Donaldson Company Inc's inventory turnover has fluctuated over the past five years, ranging from 4.46 to 5.43. The inventory turnover ratio measures how efficiently the company manages its inventory by indicating the number of times inventory is sold and replaced during the period.
A higher inventory turnover ratio generally indicates that inventory is moving quickly, which is positive as it reduces the risk of inventory obsolescence and holding costs. However, a lower ratio may suggest slower inventory turnover, potentially leading to higher carrying costs and liquidity issues.
In 2023, there was a peak in inventory turnover at 5.43, indicating that the company was managing its inventory efficiently. However, in 2022, the ratio dropped to 4.46, reflecting a potential decrease in sales or excess inventory. Overall, the trend shows that Donaldson Company Inc has maintained a relatively stable inventory turnover ratio over the past five years, with minor fluctuations.
Further analysis of the company's operations and inventory management practices would be necessary to fully understand the factors driving these changes in inventory turnover.