Gates Industrial Corporation plc (GTES)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,211,300 | 2,303,600 | 2,135,200 | 1,758,300 | 1,944,600 |
| Inventory | US$ in thousands | 647,200 | 656,200 | 682,600 | 508,200 | 475,100 |
| Inventory turnover | 3.42 | 3.51 | 3.13 | 3.46 | 4.09 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,211,300K ÷ $647,200K
= 3.42
Inventory turnover is a financial ratio that measures the efficiency of a company in managing its inventory levels. Gates Industrial Corporation plc's inventory turnover has fluctuated over the past five years. In 2019, the company had the highest inventory turnover of 4.09, indicating that it sold and replaced its inventory more than four times during that year. However, there has been a downward trend in inventory turnover since then, with a sharp decrease in 2021 to 3.13.
In 2022 and 2023, the inventory turnover improved slightly to 3.51 and 3.42, respectively. This indicates that the company is now selling and replacing its inventory around three to three and a half times a year. A lower inventory turnover may suggest that the company is holding onto its inventory for a longer period, which could tie up capital and potentially lead to obsolete inventory.
Overall, Gates Industrial Corporation plc's inventory turnover has shown variability in recent years, and the company may benefit from further analysis to understand the reasons behind these fluctuations and to optimize its inventory management practices.
Peer comparison
Dec 31, 2023