Timken Company (TKR)
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 | 3,149,900 | 3,178,700 | 3,183,400 | 3,224,000 | 3,277,300 | 3,285,900 | 3,301,700 | 3,246,700 | 3,197,900 | 3,186,200 | 3,152,700 | 3,101,400 | 3,030,400 | 2,910,900 | 2,772,400 | 2,585,000 | 2,503,300 | 2,488,800 | 2,494,400 | 2,615,500 |
| Inventory | US$ in thousands | 1,195,600 | 1,255,300 | 1,233,300 | 1,231,200 | 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 |
| Inventory turnover | 2.63 | 2.53 | 2.58 | 2.62 | 2.67 | 2.73 | 2.64 | 2.68 | 2.68 | 2.81 | 2.72 | 2.79 | 2.91 | 2.99 | 3.02 | 2.99 | 2.98 | 3.15 | 3.18 | 3.19 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,149,900K ÷ $1,195,600K
= 2.63
Inventory turnover measures how efficiently a company manages its inventory by calculating the number of times inventory is sold or used up within a specific period. For Timken Company, the inventory turnover has been gradually decreasing from 3.19 in March 2020 to 2.53 in September 2024. This decline indicates that Timken is taking longer to sell its inventory relative to the earlier periods, which could be a sign of overstocking, poor sales, or inefficient inventory management.
A decreasing inventory turnover ratio may suggest potential concerns such as obsolete inventory, declining demand for products, or ineffective inventory control processes. Timken may need to review its inventory levels, pricing strategies, and supply chain management to optimize inventory turnover and improve overall operational efficiency. It is essential for the company to address the declining trend in inventory turnover to enhance liquidity, profitability, and overall financial performance.
Peer comparison
Dec 31, 2024
Dec 31, 2024