McCormick & Company Incorporated (MKC)
Inventory turnover
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 4,159,700 | 4,076,000 | 3,823,300 | 3,300,900 | 3,202,100 |
| Inventory | US$ in thousands | 1,126,500 | 1,340,100 | 1,182,300 | 1,032,600 | 801,200 |
| Inventory turnover | 3.69 | 3.04 | 3.23 | 3.20 | 4.00 |
November 30, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $4,159,700K ÷ $1,126,500K
= 3.69
The inventory turnover ratio for McCormick & Co., Inc. has fluctuated in the past five years. In 2019, the ratio was at its highest at 4.00, indicating efficient inventory management. However, in the following years, the ratio experienced some variation, dropping to 3.20 in 2020, increasing to 3.23 in 2021, and then dropping again to 3.04 in 2022 before rising to 3.69 in 2023.
A high inventory turnover ratio generally suggests that the company is selling its inventory quickly, which can be a sign of effective sales and demand forecasting. However, the decreasing trend in the inventory turnover ratio over the past few years could indicate that inventory is being held for longer periods, potentially tying up capital and increasing storage and carrying costs. It may also point to potential issues with demand forecasting, leading to excess or obsolete inventory.
Further analysis, such as comparisons with industry averages and peer companies, as well as an understanding of the company's specific business model and industry dynamics, would be necessary to gain a more comprehensive understanding of the implications of these inventory turnover figures for McCormick & Co., Inc.