Element Solutions Inc (ESI)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,421,200 | 1,414,700 | 1,596,700 | 1,439,000 | 1,067,700 |
| Inventory | US$ in thousands | 246,200 | 298,900 | 290,700 | 274,400 | 203,100 |
| Inventory turnover | 5.77 | 4.73 | 5.49 | 5.24 | 5.26 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,421,200K ÷ $246,200K
= 5.77
The inventory turnover ratio for Element Solutions Inc. demonstrates variations over the analyzed fiscal years, reflecting changes in inventory management efficiency. At the end of 2020, the ratio stood at 5.26, indicating that inventory was sold and replaced approximately 5.26 times during the year. In 2021, the ratio slightly declined to 5.24, suggesting marginally less frequent inventory turnover compared to the prior year. The ratio increased in 2022 to 5.49, indicating an improvement in inventory management efficiency, with inventory being circulated more swiftly within the year.
However, the trend reverses in 2023, where the ratio decreases notably to 4.73. This decline may suggest a slowdown in inventory turnover, potentially resulting from excess inventory buildup, slower sales, or strategic stockpiling. The following year, 2024, exhibits a rebound, with the ratio rising to 5.77. This increase surpasses the previous years' figures, indicating a substantial improvement in inventory turnover, which could reflect enhanced sales efficiency, better inventory controls, or a reduction in inventory levels relative to sales.
Overall, the observed fluctuations in the inventory turnover ratio suggest periods of both operational efficiency and challenges in inventory management. The trend culminating in the higher ratio of 2024 points toward a positive development in inventory management effectiveness.
Peer comparison
Dec 31, 2024