Sherwin-Williams Co (SHW)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 19,741,500 | 19,215,600 | 17,284,300 | 15,514,700 | 9,864,700 |
| Inventory | US$ in thousands | 2,329,800 | 2,626,500 | 1,927,200 | 1,804,100 | 1,889,600 |
| Inventory turnover | 8.47 | 7.32 | 8.97 | 8.60 | 5.22 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $19,741,500K ÷ $2,329,800K
= 8.47
Sherwin-Williams Co.'s inventory turnover has fluctuated over the past five years, ranging from a low of 4.88 in 2022 to a high of 5.92 in 2021. The inventory turnover ratio indicates the efficiency with which the company manages its inventory levels. A higher inventory turnover ratio suggests that the company is selling its inventory more frequently within a given period.
The 2023 inventory turnover of 5.28 indicates that Sherwin-Williams Co. was able to sell its inventory 5.28 times during the year. This suggests a moderate level of efficiency in managing its inventory levels. It is lower than the peak in 2021, but still higher than 2020 and 2019 levels, indicating improvement over recent years.
It is important for the company to maintain an optimal balance in its inventory levels to ensure that it meets customer demand without overstocking. Overall, the inventory turnover trend indicates that Sherwin-Williams Co. has been able to efficiently manage its inventory turnover in recent years, which is a positive sign for the company's operational performance.
Peer comparison
Dec 31, 2023