Honeywell International Inc (HON)
Inventory turnover
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 28,874,000 | 28,822,000 | 29,087,000 | 29,566,000 | 29,892,000 | 29,719,000 | 29,340,000 | 29,111,000 | 28,914,000 | 28,918,000 | 28,509,000 | 27,758,000 | 27,552,000 | 28,261,000 | 29,124,000 | 30,179,000 | 30,632,000 | 31,114,000 | 32,989,000 | 34,737,000 |
| Inventory | US$ in thousands | 6,178,000 | 6,000,000 | 5,890,000 | 5,776,000 | 5,538,000 | 5,501,000 | 5,576,000 | 5,472,000 | 5,138,000 | 4,967,000 | 4,723,000 | 4,607,000 | 4,489,000 | 4,705,000 | 4,753,000 | 4,584,000 | 4,421,000 | 4,601,000 | 4,600,000 | 4,548,000 |
| Inventory turnover | 4.67 | 4.80 | 4.94 | 5.12 | 5.40 | 5.40 | 5.26 | 5.32 | 5.63 | 5.82 | 6.04 | 6.03 | 6.14 | 6.01 | 6.13 | 6.58 | 6.93 | 6.76 | 7.17 | 7.64 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $28,874,000K ÷ $6,178,000K
= 4.67
Inventory turnover is a key financial ratio that indicates how efficiently a company manages its inventory levels. It is calculated by dividing the cost of goods sold by the average inventory level. A higher inventory turnover ratio generally indicates better inventory management.
Honeywell International Inc's inventory turnover has shown a decreasing trend over the past eight quarters, starting at 4.27 in Q1 2022 and reaching a low of 3.72 in Q4 2023. This downward trend suggests that the company may be managing its inventory less efficiently over time.
While the average industry inventory turnover ratio can vary depending on the sector, a ratio below the industry average could indicate excessive inventory levels or slow-moving inventory. Honeywell's current inventory turnover ratios are consistently lower than the optimal benchmark of 5, which is generally considered healthy for most industries.
The declining trend in Honeywell's inventory turnover ratio may warrant further investigation into the company's inventory management practices. It is essential for the company to analyze the reasons behind the decrease in inventory turnover and take necessary steps to improve efficiency, such as optimizing inventory levels, streamlining supply chain processes, and reducing excess inventory.
Overall, based on the analysis of inventory turnover data from Q1 2022 to Q4 2023, it is evident that Honeywell International Inc may need to focus on improving its inventory management strategies to enhance operational efficiency and maximize profitability.
Peer comparison
Dec 31, 2023
Dec 31, 2023
See also:
Honeywell International Inc Inventory Turnover (Quarterly Data)