ITT Inc (ITT)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 2,175,700 | 2,065,400 | 1,865,500 | 1,695,600 | 1,936,300 |
| Inventory | US$ in thousands | 575,400 | 533,900 | 430,900 | 360,500 | 392,900 |
| Inventory turnover | 3.78 | 3.87 | 4.33 | 4.70 | 4.93 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $2,175,700K ÷ $575,400K
= 3.78
Inventory turnover is a key financial ratio that measures the efficiency with which a company manages its inventory. The ratio indicates how many times a company's inventory is sold and replaced over a specific period. A higher inventory turnover generally indicates that inventory is being sold more quickly, which can be a positive sign of efficient inventory management.
Analyzing the inventory turnover trend for ITT Inc over the past five years, we observe a gradual decline in the ratio from 4.93 in 2019 to 3.78 in 2023. This decreasing trend suggests that the company may be taking longer to sell its inventory compared to previous years. A lower inventory turnover could potentially indicate overstocking, slow-moving inventory, or declining sales.
It is important for ITT Inc to closely monitor its inventory turnover and assess the reasons behind the declining trend. By identifying and addressing inefficiencies in inventory management, such as optimizing inventory levels, improving forecasting accuracy, or streamlining operations, the company can strive to improve its inventory turnover and overall operational efficiency.
Peer comparison
Dec 31, 2023