Eastman Chemical Company (EMN)

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	7,149,000	7,403,000	7,788,000	8,162,000	8,443,000	8,581,000	8,471,000	8,329,000	7,976,000	7,501,000	7,064,000	6,645,000	6,498,000	6,546,000	6,676,000	6,897,000	7,039,000	7,241,000	7,309,000	7,452,000
Inventory	US$ in thousands	1,683,000	1,721,000	1,960,000	1,944,000	1,894,000	1,975,000	1,826,000	1,671,000	1,504,000	1,630,000	1,501,000	1,505,000	1,379,000	1,338,000	1,419,000	1,659,000	1,662,000	1,695,000	1,730,000	1,704,000
Inventory turnover		4.25	4.30	3.97	4.20	4.46	4.34	4.64	4.98	5.30	4.60	4.71	4.42	4.71	4.89	4.70	4.16	4.24	4.27	4.22	4.37

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $7,149,000K ÷ $1,683,000K
= 4.25

Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory. In the case of Eastman Chemical Co, the inventory turnover ratio has fluctuated over the past eight quarters.

The inventory turnover ratio for Q4 2023 was 4.25, slightly lower than the previous quarter's 4.30. This indicates that Eastman Chemical Co generated revenue from its inventory 4.25 times during the quarter. A decreasing trend in inventory turnover could suggest that the company is holding onto its inventory for a longer period before selling it.

Comparing the latest ratio to historical data, the inventory turnover for Q4 2023 is lower than the same quarter in the previous year (4.46 in Q4 2022). This may imply that Eastman Chemical Co is experiencing challenges in efficiently managing and selling its inventory.

It is important for Eastman Chemical Co to closely monitor its inventory turnover ratio and implement strategies to improve efficiency in managing its inventory levels. Analyzing the reasons behind the fluctuations in this ratio can help the company make informed decisions to optimize its inventory management practices and enhance overall financial performance.