Owens Corning Inc (OC)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 7,217,000 | 7,389,000 | 6,459,000 | 6,528,000 | 5,551,000 |
| Inventory | US$ in thousands | 1,198,000 | 1,334,000 | 1,078,000 | 855,000 | 1,033,000 |
| Inventory turnover | 6.02 | 5.54 | 5.99 | 7.64 | 5.37 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $7,217,000K ÷ $1,198,000K
= 6.02
The inventory turnover for Owens Corning has varied over the past five years. In 2019, the inventory turnover was 5.37, which increased to 6.37 in 2020 before decreasing to 5.83 in 2021. Subsequently, there was a further decline to 5.36 in 2022. However, in 2023, the inventory turnover improved to 5.84.
The inventory turnover ratio indicates how efficiently Owens Corning is managing its inventory. A higher turnover ratio suggests that the company is selling its goods quickly, which can lead to lower holding costs and potential obsolescence risks. On the other hand, a lower turnover ratio may indicate overstocking or difficulties in selling inventory, which could tie up resources and impact profitability.
Overall, Owens Corning's inventory turnover has shown some fluctuation in recent years, but the company has managed to maintain a relatively healthy turnover ratio, indicating efficient inventory management practices. It is essential for the company to continue monitoring and optimizing its inventory turnover to ensure operational efficiency and financial health.