Emerson Electric Company (EMR)
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 | 13,908,000 | 12,829,000 | 13,612,000 | 14,620,000 | 15,534,000 | 16,412,000 | 16,135,000 | 15,899,000 | 15,641,000 | 15,472,000 | 15,017,000 | 14,519,000 | 14,305,000 | 14,415,000 | 14,722,000 | 15,233,000 | 15,607,000 | 15,468,000 | 15,446,000 | 15,192,000 |
| Inventory | US$ in thousands | 2,432,000 | 2,006,000 | 2,085,000 | 2,034,000 | 1,999,000 | 1,742,000 | 2,319,000 | 2,399,000 | 2,335,000 | 2,050,000 | 2,114,000 | 2,016,000 | 2,013,000 | 1,928,000 | 2,102,000 | 2,058,000 | 2,064,000 | 1,880,000 | 2,061,000 | 2,073,000 |
| Inventory turnover | 5.72 | 6.40 | 6.53 | 7.19 | 7.77 | 9.42 | 6.96 | 6.63 | 6.70 | 7.55 | 7.10 | 7.20 | 7.11 | 7.48 | 7.00 | 7.40 | 7.56 | 8.23 | 7.49 | 7.33 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $13,908,000K ÷ $2,432,000K
= 5.72
Inventory turnover is a key ratio used to assess how efficiently a company manages its inventory. A higher inventory turnover ratio indicates that the company is selling its products more quickly and efficiently.
Looking at the historical trend of Emerson Electric Co.'s inventory turnover from Q2 2022 to Q1 2024, we observe a general decline in the ratio. The inventory turnover ratio decreased from 4.65 in Q2 2022 to 3.37 in Q1 2024.
The gradual decrease in the inventory turnover ratio could indicate potential issues with inventory management. A decreasing ratio may suggest that the company is holding onto its inventory for a longer period before selling it, which can tie up resources and result in higher carrying costs.
It is important for Emerson Electric Co. to monitor and analyze its inventory turnover continuously to optimize inventory levels, avoid overstocking, and ensure timely sales of its products. Management should focus on improving inventory control and supply chain efficiency to enhance overall operational performance and profitability.
Peer comparison
Dec 31, 2023
Dec 31, 2023
See also:
Emerson Electric Company Inventory Turnover (Quarterly Data)