GATX Corporation (GATX)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 242,600 | 593,400 | 603,000 | 566,800 | 819,600 |
| Inventory | US$ in thousands | 71,800 | 74,000 | 60,200 | 52,000 | 64,300 |
| Inventory turnover | 3.38 | 8.02 | 10.02 | 10.90 | 12.75 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $242,600K ÷ $71,800K
= 3.38
The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times during a period inventory is sold and replaced.
For GATX Corporation, the inventory turnover has been declining over the years, from 12.75 in December 31, 2020, to 3.38 in December 31, 2024. A decreasing inventory turnover could indicate potential issues with managing inventory levels, slow-moving stock, or inefficiencies in production or sales processes.
A lower inventory turnover ratio may also suggest the company is carrying too much inventory relative to its sales volume, leading to higher carrying costs and potential obsolescence risks.
It is important for GATX Corporation to closely monitor and address the factors contributing to the declining inventory turnover to improve operational efficiency and financial performance.
Peer comparison
Dec 31, 2024