Raytheon Technologies Corp (RTX)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 6,488,000 | 6,114,000 | 5,731,000 | 5,862,000 | 48,056,000 |
| Inventory | US$ in thousands | 12,768,000 | 11,777,000 | 10,617,000 | 9,178,000 | 9,411,000 |
| Inventory turnover | 0.51 | 0.52 | 0.54 | 0.64 | 5.11 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $6,488,000K ÷ $12,768,000K
= 0.51
The inventory turnover for Raytheon Technologies Corp has shown a significant decline over the past five years. In December 2020, the inventory turnover stood at 5.11, indicating that the company was able to sell and replace its inventory over 5 times during that year. However, by December 2021, the inventory turnover dropped sharply to 0.64, suggesting a significant decrease in sales relative to the level of inventory held.
This downward trend continued in the subsequent years, with inventory turnover decreasing to 0.54 by December 2022, 0.52 by December 2023, and further to 0.51 by December 2024. A decreasing inventory turnover ratio may indicate inefficiencies in inventory management, such as overstocking or slow-moving inventory.
It is important for Raytheon Technologies Corp to closely monitor and address the reasons behind the declining inventory turnover to optimize working capital, reduce carrying costs, and improve overall operational efficiency.
Peer comparison
Dec 31, 2024