Motorola Solutions Inc (MSI)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	5,380,000	5,350,000	5,269,000	5,158,000	5,041,000	4,965,000	5,031,000	4,967,000	4,883,000	4,664,000	4,384,000	4,253,000	4,131,000	4,121,000	4,018,000	3,851,000	3,806,000	3,835,000	3,863,000	3,940,000
Inventory	US$ in thousands	766,000	816,000	803,000	840,000	827,000	959,000	1,020,000	1,082,000	1,055,000	1,157,000	1,071,000	952,000	788,000	604,000	559,000	530,000	508,000	489,000	449,000	442,000
Inventory turnover		7.02	6.56	6.56	6.14	6.10	5.18	4.93	4.59	4.63	4.03	4.09	4.47	5.24	6.82	7.19	7.27	7.49	7.84	8.60	8.91

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $5,380,000K ÷ $766,000K
= 7.02

Inventory turnover ratio measures how efficiently a company manages its inventory by showing how many times the company sells and replaces its inventory during a specific period. For Motorola Solutions Inc, the inventory turnover ratio has been gradually declining from 8.91 as of March 31, 2020, to 7.02 as of December 31, 2024. This indicates that the company's inventory is being turned over less frequently over the years.

A decreasing inventory turnover ratio could suggest various possibilities, such as overstocking, slow-moving inventory, or declining sales. In Motorola Solutions Inc's case, it appears that the company may be facing challenges in managing its inventory efficiently as the ratio has been on a downward trend.

A lower inventory turnover ratio may lead to higher carrying costs and potential obsolescence risks. It could also indicate liquidity concerns if the company is tying up too much capital in slow-moving inventory. Investors and stakeholders should closely monitor the trend in the inventory turnover ratio to assess the company's ability to efficiently manage its inventory and generate sales.