ESAB Corp (ESAB)
Inventory turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 1,718,855 | 1,752,919 | 1,764,741 | 1,776,772 | 1,770,889 | 1,764,130 | 1,743,775 | 1,720,981 | 1,707,950 | 1,679,625 | 1,667,671 | 1,645,379 | 1,590,132 |
| Inventory | US$ in thousands | 403,711 | 422,654 | 426,520 | 405,601 | 392,858 | 425,691 | 447,321 | 448,342 | 416,829 | 446,531 | 473,799 | 462,535 | 420,062 |
| Inventory turnover | 4.26 | 4.15 | 4.14 | 4.38 | 4.51 | 4.14 | 3.90 | 3.84 | 4.10 | 3.76 | 3.52 | 3.56 | 3.79 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,718,855K ÷ $403,711K
= 4.26
ESAB Corp's inventory turnover has shown a relatively stable trend over the analyzed period, fluctuating between 3.52 and 4.51 times. The inventory turnover ratio measures how efficiently a company manages its inventory by indicating the number of times inventory is sold and replaced over a specific period.
From December 31, 2021, to December 31, 2024, ESAB Corp's inventory turnover improved from 3.79 to 4.26. This indicates that the company's ability to sell and replace its inventory has been gradually increasing, which can be a positive sign of effective inventory management, sales performance, and operational efficiency.
A higher inventory turnover ratio generally suggests that inventory is selling faster, which could result from better demand forecasting, efficient inventory control, and effective sales strategies. ESAB Corp's consistent improvement in inventory turnover over the analyzed period reflects a positive trend in the company's operational performance and management of its inventory levels. It may also signify that ESAB Corp is keeping optimal inventory levels, avoiding excessive stock that could tie up capital and potentially lead to obsolescence.
Overall, the increasing trend in ESAB Corp's inventory turnover ratio indicates that the company is effectively managing its inventory, selling products efficiently, and generating revenue from its goods on a more frequent basis.
Peer comparison
Dec 31, 2024
Dec 31, 2024