Emerson Electric Company (EMR)

Inventory turnover

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Cost of revenue	US$ in thousands	15,670,000	12,829,000	16,448,000	15,472,000	14,415,000
Inventory	US$ in thousands	2,180,000	2,006,000	1,742,000	2,050,000	1,928,000
Inventory turnover		7.19	6.40	9.44	7.55	7.48

September 30, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $15,670,000K ÷ $2,180,000K
= 7.19

Emerson Electric Company's inventory turnover has shown variability over the past five years. The inventory turnover ratio indicates how efficiently the company is managing its inventory by selling and restocking goods. In 2024, the inventory turnover ratio increased to 7.19, which is a positive sign of more effective inventory management compared to the previous year.

However, it is worth noting that in 2023, the inventory turnover ratio was at 6.40, indicating a slightly lower efficiency in inventory management. The most significant increase in inventory turnover was observed in 2022 when the ratio reached 9.44, suggesting that the company was able to sell and replenish its inventory at a faster pace.

Overall, Emerson Electric Company's inventory turnover has generally been above 6 in the past five years, indicating a relatively efficient management of its inventory levels. The company should continue to monitor and strive to maintain an optimal balance between holding too much inventory, which can tie up capital, and not having enough inventory, which can lead to stockouts.