Otis Worldwide Corp (OTIS)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 1,993,000 | 2,000,000 | 2,010,000 | 2,043,000 | 2,023,000 | 1,955,000 | 1,907,000 | 1,883,000 | 1,898,000 | 1,966,000 | 2,036,000 | 2,072,000 | 2,102,000 | 2,167,000 | 2,180,000 | 2,146,000 | 3,693,000 |
| Inventory | US$ in thousands | 557,000 | 625,000 | 605,000 | 593,000 | 612,000 | 624,000 | 640,000 | 642,000 | 617,000 | 603,000 | 596,000 | 626,000 | 622,000 | 628,000 | 673,000 | 686,000 | 659,000 |
| Inventory turnover | 3.58 | 3.20 | 3.32 | 3.45 | 3.31 | 3.13 | 2.98 | 2.93 | 3.08 | 3.26 | 3.42 | 3.31 | 3.38 | 3.45 | 3.24 | 3.13 | 5.60 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,993,000K ÷ $557,000K
= 3.58
Inventory turnover is a financial ratio that measures how efficiently a company manages its inventory by calculating the number of times inventory is sold and replaced during a specific period. For Otis Worldwide Corp, the inventory turnover has fluctuated over the period from December 31, 2020, to December 31, 2024.
The inventory turnover ratio for Otis Worldwide Corp started at 5.60 on December 31, 2020, indicating that the company sold and replaced its inventory approximately 5.60 times during that year. However, the ratio decreased to 2.93 by March 31, 2023, before gradually increasing to 3.58 by December 31, 2024.
A higher inventory turnover ratio is generally considered favorable as it suggests that the company is efficiently managing its inventory levels and turning over its inventory quickly. On the other hand, a lower inventory turnover ratio may indicate overstocking or slow-moving inventory, which can tie up capital and lead to potential obsolescence risks.
Overall, the trend in Otis Worldwide Corp's inventory turnover ratio showcases some fluctuations over the analyzed period, with the company showing efforts to optimize its inventory management practices and improve efficiency. It would be essential for the company to continue monitoring and adjusting its inventory levels to maintain a balance between meeting customer demand and avoiding excess inventory.
Peer comparison
Dec 31, 2024
Dec 31, 2024