Dow Inc (DOW)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 42,330,000 | 50,574,000 | 46,307,000 | 33,346,000 | 36,657,000 |
| Inventory | US$ in thousands | 6,076,000 | 6,988,000 | 7,372,000 | 5,701,000 | 6,214,000 |
| Inventory turnover | 6.97 | 7.24 | 6.28 | 5.85 | 5.90 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $42,330,000K ÷ $6,076,000K
= 6.97
The inventory turnover ratio for Dow Inc over the past five years shows a consistent performance. The ratio indicates how efficiently the company is managing its inventory by measuring the number of times inventory is sold and replaced over a period.
For the years 2019 through 2023, the inventory turnover ratios were 5.90, 5.85, 5.99, 6.92, and 6.54, respectively. These figures indicate that the company has been effective in managing its inventory levels, with a higher ratio generally viewed as more favorable as it implies quicker sales cycles and lower inventory holding costs.
The slight decline in the inventory turnover ratio from 2022 to 2023 may be attributed to various factors, such as changes in customer demand, production efficiency, or inventory management practices. Overall, the trend suggests that Dow Inc has been maintaining a reasonably efficient inventory turnover, which is crucial for optimizing working capital and reducing the risk of obsolescence.
Peer comparison
Dec 31, 2023