Stepan Company (SCL)

Inventory turnover measures how effectively a company is managing its inventory by indicating the number of times a company sells and replaces its inventory during a specific period. In the case of Stepan Co., the inventory turnover has fluctuated over the past five years.

In 2023, the inventory turnover was 7.71, indicating that Stepan Co. sold and replaced its inventory approximately 7.71 times during the year. This represents an increase from the previous two years, suggesting that the company improved its efficiency in managing inventory.

In 2022, the inventory turnover was 5.83, which was lower than in 2021 but slightly higher than in 2020. This may indicate that Stepan Co. experienced some challenges managing its inventory effectively during this period.

In 2021 and 2020, the inventory turnover was 6.38 and 6.79, respectively, showing relatively stable performance in managing inventory turnover.

The highest inventory turnover in the years provided was in 2019, at 7.46, suggesting that Stepan Co. was more efficient in managing its inventory that year compared to the subsequent years.

Overall, a higher inventory turnover ratio indicates that a company is selling goods quickly and efficiently, while a lower ratio may suggest inefficiency in managing inventory levels. Stepan Co. should continue monitoring and analyzing its inventory turnover to maintain optimal levels and improve its overall operational efficiency.

Peer comparison

Dec 31, 2023