Pentair PLC (PNR)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,334,700 | 3,568,700 | 3,049,400 | 2,494,800 | 1,905,700 |
| Inventory | US$ in thousands | 677,700 | 790,000 | 562,900 | 420,000 | 377,400 |
| Inventory turnover | 4.92 | 4.52 | 5.42 | 5.94 | 5.05 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,334,700K ÷ $677,700K
= 4.92
Inventory turnover measures how efficiently a company manages its inventory by calculating how many times a company sells and replaces its inventory during a specific period. Pentair plc's inventory turnover has shown a declining trend over the past five years, decreasing from 5.05 in 2019 to 3.81 in 2023. This indicates that Pentair is taking longer to sell and replace its inventory. A lower inventory turnover could suggest overstocking, slowing sales, or inefficient inventory management. It may lead to higher carrying costs, potential obsolescence, and reduced liquidity. Pentair should focus on optimizing inventory levels, improving demand forecasting, and streamlining supply chain processes to enhance its inventory turnover in the future.
Peer comparison
Dec 31, 2023