Masco Corporation (MAS)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 6,613,000 | 7,434,000 | 7,049,000 | 5,920,000 | 5,642,000 |
| Inventory | US$ in thousands | 1,022,000 | 1,236,000 | 1,216,000 | 876,000 | 754,000 |
| Inventory turnover | 6.47 | 6.01 | 5.80 | 6.76 | 7.48 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $6,613,000K ÷ $1,022,000K
= 6.47
Masco Corp.'s inventory turnover ratio, which measures the efficiency at which the company manages its inventory, has shown some fluctuations over the past five years. In 2023, the inventory turnover ratio was 5.02, indicating that the company converted its inventory into sales approximately five times during the year. This represents a slight increase from the previous year's ratio of 4.83.
Despite the improvement in 2023, Masco Corp.'s inventory turnover ratio has generally been on a declining trend since 2019, where it was at its highest at 5.75. The decreasing trend from 2019 to 2021, with ratios of 5.75, 5.25, and 4.53, may indicate potential inefficiencies in inventory management during those years. However, the increase in 2023 to 5.02 suggests a positive turnaround in the company's inventory management practices.
Overall, Masco Corp. should continue monitoring its inventory turnover ratio to ensure that inventory levels are optimized to meet customer demand efficiently. The recent improvement in the ratio is a positive sign, but sustained efforts are needed to maintain or further enhance inventory turnover efficiency in the future.
Peer comparison
Dec 31, 2023