Eaton Corporation PLC (ETN)
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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 15,376,000 | 15,190,000 | 14,975,000 | 14,781,000 | 14,655,000 | 14,577,000 | 14,438,000 | 14,196,000 | 13,866,000 | 13,545,000 | 13,338,000 | 13,378,000 | 13,293,000 | 13,245,000 | 12,958,000 | 12,290,000 | 12,408,000 | 12,786,000 | 13,247,000 | 14,067,000 |
| Inventory | US$ in thousands | 4,227,000 | 4,178,000 | 3,963,000 | 3,868,000 | 3,739,000 | 3,713,000 | 3,670,000 | 3,604,000 | 3,430,000 | 3,428,000 | 3,445,000 | 3,317,000 | 2,969,000 | 2,802,000 | 2,668,000 | 2,399,000 | 2,109,000 | 2,096,000 | 2,138,000 | 2,346,000 |
| Inventory turnover | 3.64 | 3.64 | 3.78 | 3.82 | 3.92 | 3.93 | 3.93 | 3.94 | 4.04 | 3.95 | 3.87 | 4.03 | 4.48 | 4.73 | 4.86 | 5.12 | 5.88 | 6.10 | 6.20 | 6.00 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $15,376,000K ÷ $4,227,000K
= 3.64
The inventory turnover ratio indicates how many times a company's inventory is sold and replaced over a specific period. In the case of Eaton Corporation PLC, we observed a gradual decline in the inventory turnover ratio from 6.00 on March 31, 2020, to 3.64 on December 31, 2024.
The decreasing trend in inventory turnover suggests that Eaton Corporation may be holding onto its inventory for longer periods, which could indicate slowing sales, poor demand forecasting, or excess inventory levels.
A lower inventory turnover ratio may also imply inefficiencies in managing inventory levels, increased carrying costs, and potential risks of obsolescence.
It is essential for Eaton Corporation to closely monitor and address the factors contributing to the declining inventory turnover ratio to optimize its inventory management, improve cash flow, and enhance overall operational efficiency.
Peer comparison
Dec 31, 2024
Dec 31, 2024