Timken Company (TKR)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,132,300 | 3,318,100 | 3,208,600 | 3,030,400 | 2,503,300 |
| Inventory | US$ in thousands | 1,195,600 | 1,229,100 | 1,191,300 | 1,042,700 | 841,300 |
| Inventory turnover | 2.62 | 2.70 | 2.69 | 2.91 | 2.98 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,132,300K ÷ $1,195,600K
= 2.62
Timken Company's inventory turnover has been relatively consistent over the past five years, with slight fluctuations observed. The inventory turnover ratio decreased from 2.98 in December 2020 to 2.62 in December 2024. This trend indicates that the company is taking longer to sell through its inventory over the years.
A decreasing inventory turnover ratio could suggest potential issues such as overstocking, slow-moving inventory, or changing customer demand. It is important for Timken Company to monitor and manage its inventory effectively to avoid potential inefficiencies and costs associated with holding excess inventory.
Overall, Timken Company's inventory turnover ratio trend highlights the need for continuous evaluation and optimization of its inventory management strategies to improve operational efficiency and profitability.
Peer comparison
Dec 31, 2024