Hubbell Inc (HUBB)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,413,300 | 4,324,800 | 3,741,400 | 3,752,500 | 4,098,400 |
| Inventory | US$ in thousands | 832,900 | 740,700 | 662,100 | 526,700 | 633,000 |
| Inventory turnover | 5.30 | 5.84 | 5.65 | 7.12 | 6.47 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $4,413,300K ÷ $832,900K
= 5.30
Hubbell Inc.'s inventory turnover has exhibited a decreasing trend over the past five years, reflecting a decline in the company's efficiency in managing its inventory. The inventory turnover ratio decreased from 5.12 in 2019 to 4.18 in 2023. This implies that Hubbell Inc. generated less revenue relative to its average inventory levels in 2023 compared to previous years.
A lower inventory turnover ratio may indicate overstocking or slow-moving inventory, which could tie up capital and lead to potential obsolescence risks. Hubbell Inc. should focus on optimizing its inventory management processes to improve efficiency and avoid carrying excess inventory that could impact the company's liquidity and profitability.
Peer comparison
Dec 31, 2023