Sherwin-Williams Co (SHW)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 11,903,400 | 12,293,800 | 12,823,800 | 11,401,900 | 9,679,100 |
| Inventory | US$ in thousands | 2,288,100 | 2,329,800 | 2,626,500 | 1,927,200 | 1,804,100 |
| Inventory turnover | 5.20 | 5.28 | 4.88 | 5.92 | 5.37 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $11,903,400K ÷ $2,288,100K
= 5.20
Sherwin-Williams Co's inventory turnover ratio has shown some fluctuations over the years. The ratio increased from 5.37 in December 31, 2020, to 5.92 in December 31, 2021, indicating the company's ability to turn its inventory into sales more efficiently. However, there was a slight decrease in the ratio to 4.88 in December 31, 2022, before slightly rebounding to 5.28 in December 31, 2023, and then stabilizing at 5.20 in December 31, 2024.
Overall, the trend suggests that Sherwin-Williams Co has generally been managing its inventory effectively, with a turnover ratio consistently above 4. This indicates that the company is efficiently selling its inventory relative to the amount of inventory it holds. It is crucial for companies to strike a balance between holding enough inventory to meet demand and avoiding excessive inventory that can tie up resources. Sherwin-Williams Co's inventory turnover ratio indicates that it has been effectively managing this balance in recent years.
Peer comparison
Dec 31, 2024