Timken Company (TKR)
Inventory turnover
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of revenue (ttm) | US$ in thousands | 4,112,700 | 3,309,800 | 3,319,200 | 3,233,300 | 3,121,900 | 3,099,800 | 3,008,900 | 2,932,700 | 2,853,800 | 2,845,000 | 2,692,800 | 2,476,700 | 2,404,400 | 2,428,700 | 2,469,200 | 2,630,500 | 2,662,200 | 2,649,800 | 2,621,600 | 2,547,900 |
| Inventory | US$ in thousands | 1,229,100 | 1,202,400 | 1,251,700 | 1,209,400 | 1,191,300 | 1,132,600 | 1,158,000 | 1,112,600 | 1,042,700 | 974,100 | 919,500 | 864,800 | 841,300 | 789,900 | 784,000 | 819,700 | 842,000 | 805,300 | 843,800 | 839,400 |
| Inventory turnover | 3.35 | 2.75 | 2.65 | 2.67 | 2.62 | 2.74 | 2.60 | 2.64 | 2.74 | 2.92 | 2.93 | 2.86 | 2.86 | 3.07 | 3.15 | 3.21 | 3.16 | 3.29 | 3.11 | 3.04 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $4,112,700K ÷ $1,229,100K
= 3.35
Inventory turnover is a key financial ratio that measures how efficiently a company is managing its inventory. It is calculated by dividing the cost of goods sold by the average inventory level. A higher turnover ratio indicates that the company is selling its inventory quickly and efficiently.
For Timken Co., the inventory turnover ratio has been relatively stable over the past eight quarters, ranging from 2.65 to 2.82. This consistency suggests that the company has been able to effectively manage its inventory levels and ensure a steady flow of goods through its supply chain.
Although the turnover ratio has fluctuated slightly, the variations have been within a narrow range, indicating a consistent performance in inventory management. A downward trend in the ratio could indicate overstocking or slowing sales, while an increasing trend could point to inventory shortages or strong sales growth.
Overall, a consistent inventory turnover ratio for Timken Co. reflects a stable and efficient inventory management process, which is crucial for maintaining optimal working capital levels and maximizing profitability.
Peer comparison
Dec 31, 2023
Dec 31, 2023