Dover Corporation (DOV)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,787,290 | 5,353,500 | 5,444,530 | 4,937,300 | 4,209,740 |
| Inventory | US$ in thousands | 1,144,840 | 1,225,450 | 1,366,610 | 1,191,100 | 835,804 |
| Inventory turnover | 4.18 | 4.37 | 3.98 | 4.15 | 5.04 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $4,787,290K ÷ $1,144,840K
= 4.18
The inventory turnover ratio is an important efficiency metric that indicates how effectively a company manages its inventory. In the case of Dover Corporation, the inventory turnover has shown a declining trend over the past five years.
At the end of December 31, 2020, the inventory turnover ratio was 5.04, indicating that the company converted its inventory into sales approximately 5.04 times during that year. However, the ratio decreased to 4.15 by December 31, 2021, suggesting that Dover Corporation took longer to sell its inventory in the following year.
Subsequently, the inventory turnover ratio continued to decline to 3.98 as of December 31, 2022, reflecting a further slowdown in inventory turnover. However, there was a slight improvement by the end of December 31, 2023, with the ratio increasing to 4.37. Finally, as of December 31, 2024, the inventory turnover ratio stood at 4.18, indicating that Dover Corporation managed to sell its inventory approximately 4.18 times during that year.
Overall, the decreasing trend in inventory turnover for Dover Corporation raises some concerns about its inventory management efficiency. A lower inventory turnover ratio may imply excess inventory levels, slow-moving products, or challenges in meeting customer demand promptly. The company may need to reassess its inventory management strategies to optimize inventory levels and improve overall operational efficiency.
Peer comparison
Dec 31, 2024