Dow Inc (DOW)

Inventory turnover

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	42,330,000	43,262,000	46,031,000	49,079,000	50,574,000	51,802,000	51,087,000	48,963,000	46,307,000	43,133,000	39,371,000	35,660,000	33,346,000	32,929,000	33,935,000	35,745,000	36,657,000
Inventory	US$ in thousands	6,076,000	6,211,000	6,487,000	6,825,000	6,988,000	7,571,000	8,225,000	7,760,000	7,372,000	7,111,000	6,952,000	6,157,000	5,701,000	5,609,000	5,784,000	6,324,000	6,214,000	6,416,000	6,841,000	9,508,000
Inventory turnover		6.97	6.97	7.10	7.19	7.24	6.84	6.21	6.31	6.28	6.07	5.66	5.79	5.85	5.87	5.87	5.65	5.90

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $42,330,000K ÷ $6,076,000K
= 6.97

Inventory turnover is an important financial ratio that provides insight into a company's efficiency in managing its inventory. It is calculated by dividing the cost of goods sold by the average inventory for a specific period. A higher inventory turnover ratio generally indicates that a company is effectively selling its inventory and replenishing it at an appropriate pace.

In the case of Dow Inc, the inventory turnover ratio has fluctuated over the past eight quarters. The trend shows that the ratio peaked at 6.92 in the first quarter of 2023 and reached its lowest point at 5.92 in the second quarter of 2022. This indicates some variability in the company's inventory management efficiency during this period.

Overall, the company has maintained relatively high inventory turnover ratios, with the most recent value at 6.54 as of December 31, 2023. This suggests that Dow Inc has been successful in efficiently converting its inventory into sales. However, it is important to consider the industry norms and specific business circumstances when evaluating the significance of these turnover ratios.

It would be beneficial for Dow Inc to continue monitoring and analyzing its inventory turnover to ensure that it aligns with the company's sales strategies and overall financial performance. Additionally, comparisons with industry benchmarks and competitors' ratios may provide further insights into the company's inventory management efficiency.