Sturm Ruger & Company Inc (RGR)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 421,228 | 410,148 | 415,757 | 451,179 | 377,427 |
| Inventory | US$ in thousands | 76,486 | 79,810 | 64,993 | 43,850 | 29,077 |
| Inventory turnover | 5.51 | 5.14 | 6.40 | 10.29 | 12.98 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $421,228K ÷ $76,486K
= 5.51
Sturm Ruger & Company Inc's inventory turnover has been gradually decreasing over the years based on the provided data. The inventory turnover ratio, which measures how efficiently a company manages its inventory by indicating how many times the inventory is sold and replaced over a specific period, shows a decline from 12.98 in December 31, 2020, to 5.51 in December 31, 2024.
A declining inventory turnover ratio may suggest issues such as overstocking, slowing sales, or inefficient inventory management practices. It indicates that the company is holding onto its inventory for a longer period before selling it. This can tie up working capital and potentially lead to increased storage and obsolescence costs.
It would be beneficial for Sturm Ruger & Company Inc to closely monitor its inventory levels and implement strategies to improve inventory turnover, such as optimizing production processes, enhancing demand forecasting, and adjusting procurement practices to better align with sales trends. This could help enhance efficiency, reduce holding costs, and improve overall liquidity and profitability in the long run.
Peer comparison
Dec 31, 2024