Emerson Electric Company (EMR)
Inventory turnover
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 12,829,000 | 16,448,000 | 15,472,000 | 14,415,000 | 15,468,000 |
| Inventory | US$ in thousands | 2,006,000 | 1,742,000 | 2,050,000 | 1,928,000 | 1,880,000 |
| Inventory turnover | 6.40 | 9.44 | 7.55 | 7.48 | 8.23 |
September 30, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $12,829,000K ÷ $2,006,000K
= 6.40
Emerson Electric Co.'s inventory turnover ratio has exhibited a declining trend over the past five years. The ratio decreased from 5.62 in 2019 to 3.86 in 2023. This downward trend in inventory turnover may indicate inefficiencies in managing inventory levels or potential challenges in sales and production planning. A lower inventory turnover ratio implies that the company is holding inventory for a longer period before it is sold, which can lead to increased carrying costs and the risk of obsolescence. It is essential for the company to focus on optimizing its inventory management processes to enhance operational efficiency and liquidity.
Peer comparison
Sep 30, 2023