GE Aerospace (GE)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 10,291,000 | 14,874,000 | 12,336,000 | 76,388,000 | 87,269,000 |
| Inventory | US$ in thousands | 16,528,000 | 14,891,000 | 15,847,000 | 15,890,000 | 17,215,000 |
| Inventory turnover | 0.62 | 1.00 | 0.78 | 4.81 | 5.07 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $10,291,000K ÷ $16,528,000K
= 0.62
General Electric Co.'s inventory turnover ratio has been decreasing over the past five years, indicating a declining efficiency in managing its inventory. The ratio decreased from 4.97 in 2019 to 3.05 in 2023. This downward trend suggests that the company is taking longer to sell its inventory or may be holding excess inventory levels compared to previous years.
A lower inventory turnover ratio could potentially lead to higher carrying costs, storage expenses, and obsolescence risks for General Electric Co. It may also indicate potential problems with sales and demand forecasting or inefficiencies in the supply chain management.
Overall, General Electric Co. should closely monitor and address the decreasing trend in its inventory turnover ratio to improve operational efficiency and maintain optimal inventory levels.
Peer comparison
Dec 31, 2023