Sonoco Products Company (SON)
Inventory turnover
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 4,963,950 | 5,179,800 | 5,208,830 | 5,290,270 | 5,345,640 | 5,411,570 | 5,588,480 | 5,760,160 | 5,804,220 | 5,617,700 | 5,252,090 | 4,852,540 | 4,528,520 | 4,454,550 | 4,352,390 | 4,229,792 | 4,191,102 | 4,151,472 | 4,184,622 | 4,271,500 |
| Inventory | US$ in thousands | 1,016,140 | 755,252 | 732,573 | 749,022 | 773,501 | 826,032 | 942,542 | 1,083,000 | 1,102,180 | 1,016,140 | 974,491 | 868,251 | 562,114 | 530,111 | 503,932 | 474,071 | 450,691 | 445,827 | 523,855 | 500,096 |
| Inventory turnover | 4.89 | 6.86 | 7.11 | 7.06 | 6.91 | 6.55 | 5.93 | 5.32 | 5.27 | 5.53 | 5.39 | 5.59 | 8.06 | 8.40 | 8.64 | 8.92 | 9.30 | 9.31 | 7.99 | 8.54 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $4,963,950K ÷ $1,016,140K
= 4.89
The inventory turnover ratio for Sonoco Products Company has shown some fluctuations over the past few years. The ratio measures how efficiently the company is managing its inventory by indicating how many times the inventory is sold and replaced over a specific period.
From March 31, 2020, to December 31, 2021, the inventory turnover ratio remained relatively stable, ranging between 7.99 to 9.31. This suggests a consistent level of efficiency in managing inventory during this period.
However, from March 31, 2022, to December 31, 2024, there was a significant decrease in the inventory turnover ratio, dropping to as low as 4.89 by the end of December 2024. This decline may indicate potential issues with inventory management, such as overstocking, slowing sales, or poor demand forecasting.
A declining inventory turnover ratio could imply an increased risk of obsolete or unsellable inventory, tying up capital and potentially impacting profitability. Sonoco Products Company may need to reassess its inventory management strategies to improve efficiency and ensure optimal use of resources.
Peer comparison
Dec 31, 2024
Dec 31, 2024