Lincoln Electric Holdings Inc (LECO)
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 | 3,308,777 | 3,051,261 | 2,815,210 | 2,568,766 | 2,480,451 | 2,429,095 | 2,341,655 | 2,257,992 | 2,165,575 | 2,058,521 | 1,973,740 | 1,822,644 | 1,784,059 | 1,814,892 | 1,853,823 | 1,959,601 | 1,995,685 | 1,993,840 | 1,986,955 | 1,999,764 |
| Inventory | US$ in thousands | 562,864 | 612,338 | 674,754 | 664,599 | 665,451 | 632,376 | 639,393 | 599,781 | 539,919 | 524,433 | 477,677 | 415,901 | 381,258 | 396,214 | 417,525 | 398,248 | 393,748 | 411,120 | 397,752 | 375,737 |
| Inventory turnover | 5.88 | 4.98 | 4.17 | 3.87 | 3.73 | 3.84 | 3.66 | 3.76 | 4.01 | 3.93 | 4.13 | 4.38 | 4.68 | 4.58 | 4.44 | 4.92 | 5.07 | 4.85 | 5.00 | 5.32 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,308,777K ÷ $562,864K
= 5.88
The inventory turnover of Lincoln Electric Holdings, Inc. has been relatively stable over the past eight quarters, ranging from a low of 3.66 in Q2 2022 to a high of 4.84 in Q4 2023. This indicates that the company is efficiently managing its inventory levels and effectively converting its inventory into sales.
Overall, the average inventory turnover ratio for the period is 4.00, suggesting that on average, the company is able to sell and replace its inventory approximately 4 times a year. This is a positive sign as higher inventory turnover ratios generally indicate efficient inventory management, effective sales strategies, and strong demand for the company's products.
The consistent performance in inventory turnover indicates that Lincoln Electric Holdings, Inc. has a good control over its inventory levels, which can help reduce carrying costs, minimize the risk of obsolete inventory, and improve cash flow. However, it is essential for the company to continue monitoring and optimizing its inventory turnover to ensure it remains in line with industry standards and business requirements.
Peer comparison
Dec 31, 2023
Dec 31, 2023