Snap-On Inc (SNA)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 92,700 | 71,100 | 81,000 | 119,300 | 111,000 |
| Inventory | US$ in thousands | 1,005,900 | 1,033,100 | 803,800 | 746,500 | 760,400 |
| Inventory turnover | 0.09 | 0.07 | 0.10 | 0.16 | 0.15 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $92,700K ÷ $1,005,900K
= 0.09
Inventory turnover is a key financial ratio that measures the efficiency with which a company manages its inventory levels. Snap-On Inc's inventory turnover over the past five years has shown a fluctuating trend.
In 2023, the inventory turnover ratio was 0.09, which indicates that Snap-On Inc turned over its inventory approximately 0.09 times during the year. This implies that it took around 4 days for the company to sell and replace its inventory. This represents a slight improvement compared to the previous year.
However, in 2022, the ratio was 0.07, signaling that it took longer for Snap-On Inc to sell and replace its inventory, possibly indicating inefficient inventory management during that year.
Looking back to 2021, the inventory turnover was 0.10, suggesting a slight improvement compared to the previous year. This ratio indicates that Snap-On Inc was able to turn over its inventory around 9 times during the year.
In 2020 and 2019, the inventory turnover ratios were 0.16 and 0.15, respectively. Both ratios indicate that Snap-On Inc was more efficient in managing its inventory during those years compared to the more recent years.
Overall, Snap-On Inc's inventory turnover has been fluctuating over the past five years, indicating potential challenges in managing inventory effectively and efficiently. A low inventory turnover ratio can sometimes indicate overstocking or slow-moving inventory, while a high ratio may suggest understocking. It is crucial for the company to strike a balance to optimize its inventory levels and improve operational efficiency.
Peer comparison
Dec 31, 2023