Stepan Company (SCL)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,908,060 | 2,048,170 | 2,346,200 | 1,950,160 | 1,486,140 |
| Inventory | US$ in thousands | 288,722 | 265,558 | 402,531 | 305,538 | 218,783 |
| Inventory turnover | 6.61 | 7.71 | 5.83 | 6.38 | 6.79 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,908,060K ÷ $288,722K
= 6.61
Stepan Company's inventory turnover ratio provides insights into how efficiently the company manages its inventory levels. The trend analysis of the inventory turnover for the past five years shows a slight fluctuation.
In December 2020, the inventory turnover ratio was 6.79 times, indicating that, on average, the company sold and replaced its inventory approximately 6.79 times during that year.
However, the ratio decreased to 6.38 in December 2021, which suggests that the company took slightly longer to sell and replace its inventory compared to the previous year.
By December 2022, the inventory turnover ratio further decreased to 5.83, indicating a potential inefficiency in managing inventory levels. However, the company managed to improve its performance by achieving an inventory turnover ratio of 7.71 in December 2023, which signifies that the company was able to sell and replace its inventory more frequently during that year.
In December 2024, the inventory turnover ratio decreased slightly to 6.61 times, still reflecting a relatively strong turnover rate. Overall, Stepan Company's inventory turnover has shown some variability over the past five years, with an average turnover rate of approximately 6.66 times. Continued monitoring of the inventory turnover ratio can help evaluate the company's inventory management effectiveness and efficiency.
Peer comparison
Dec 31, 2024