Goodyear Tire & Rubber Co (GT)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 15,176,000 | 16,557,000 | 16,953,000 | 13,692,000 | 10,337,000 |
| Inventory | US$ in thousands | 3,597,000 | 3,698,000 | 4,571,000 | 3,594,000 | 2,153,000 |
| Inventory turnover | 4.22 | 4.48 | 3.71 | 3.81 | 4.80 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $15,176,000K ÷ $3,597,000K
= 4.22
The inventory turnover ratio of Goodyear Tire & Rubber Co has shown some fluctuations over the past five years.
Starting at 4.80 in December 31, 2020, the ratio decreased to 3.81 by December 31, 2021, indicating that the company took longer to sell its inventory in 2021 compared to the previous year. This could suggest inefficiencies in inventory management or a slowdown in sales.
The trend continued with a further decrease to 3.71 by December 31, 2022, reflecting a persistent challenge in converting inventory into sales efficiently. A low inventory turnover ratio may imply excess stock levels or difficulties in selling products, potentially leading to increased carrying costs and obsolescence risk.
However, there was a notable improvement in the inventory turnover ratio for the subsequent years. By December 31, 2023, the ratio had increased to 4.48, indicating a more efficient utilization of inventory. This improvement suggests that the company may have implemented better inventory management practices or experienced stronger sales during that period.
In the most recent year, December 31, 2024, the inventory turnover ratio slightly decreased to 4.22. While still above the 2022 level, this slight decline may be worth monitoring to ensure that the company maintains optimal inventory levels and sales efficiency.
Overall, the fluctuations in Goodyear Tire & Rubber Co's inventory turnover ratio over the past five years highlight the importance of effective inventory management in maximizing sales and profitability.Keeping track of these ratios is essential for monitoring operational efficiency and identifying areas for improvement in inventory management practices.