FMC Corporation (FMC)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,572,500 | 4,331,100 | 2,873,500 | 2,590,100 | 2,526,200 |
| Inventory | US$ in thousands | 1,724,600 | 1,651,600 | 1,521,900 | 1,095,600 | 1,017,000 |
| Inventory turnover | 2.07 | 2.62 | 1.89 | 2.36 | 2.48 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,572,500K ÷ $1,724,600K
= 2.07
The inventory turnover ratio for FMC Corp. has shown a downward trend over the past five years, decreasing from 2.48 in 2019 to 1.54 in 2023. This indicates that the company is selling through its inventory at a slower rate compared to previous years. A lower inventory turnover may suggest inefficiencies in managing inventory levels or potential overstocking, which could tie up working capital and lead to increased carrying costs.
A decreasing inventory turnover ratio could also imply stagnant or declining sales relative to the amount of inventory held, which may result in lower profitability and potential liquidity issues. It is important for FMC Corp. to closely monitor its inventory management practices and strive to optimize its inventory turnover to improve operational efficiency and profitability in the future.
Peer comparison
Dec 31, 2023