Eaton Corporation PLC (ETN)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 15,375,000 | 14,576,000 | 13,865,000 | 13,293,000 | 12,408,000 |
| Inventory | US$ in thousands | 4,227,000 | 3,739,000 | 3,430,000 | 2,969,000 | 2,109,000 |
| Inventory turnover | 3.64 | 3.90 | 4.04 | 4.48 | 5.88 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $15,375,000K ÷ $4,227,000K
= 3.64
Eaton Corporation PLC's inventory turnover has shown a declining trend over the past five years. The inventory turnover ratio decreased from 5.88 in December 31, 2020, to 4.48 in December 31, 2021, then further decreased to 4.04 in December 31, 2022, and to 3.90 in December 31, 2023, and finally dropped to 3.64 in December 31, 2024. This indicates that the company is taking longer to sell its inventory over time.
A lower inventory turnover ratio may suggest issues such as overstocking, obsolescence, or difficulties in managing inventory levels efficiently. It could also imply slower sales or weakening demand for the company's products.
Eaton Corporation PLC may need to assess its inventory management practices, streamline its supply chain processes, and adjust its production levels to align with customer demand in order to improve its inventory turnover ratio and optimize its working capital efficiency.
Peer comparison
Dec 31, 2024