Trane Technologies plc (TT)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 3,761,100 | 3,143,500 | 2,694,300 | 2,569,900 | 11,037,600 |
| Inventory | US$ in thousands | 1,971,500 | 2,152,100 | 1,993,800 | 1,530,800 | 1,189,200 |
| Inventory turnover | 1.91 | 1.46 | 1.35 | 1.68 | 9.28 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $3,761,100K ÷ $1,971,500K
= 1.91
Trane Technologies plc's inventory turnover has exhibited a decreasing trend over the past five years. As of December 31, 2020, the inventory turnover stood at 9.28, indicating a high level of efficiency in managing inventory. However, there has been a significant decline in subsequent years, with the turnover dropping to 1.68 as of December 31, 2021, 1.35 as of December 31, 2022, 1.46 as of December 31, 2023, and then slightly increasing to 1.91 as of December 31, 2024.
This downward trend in inventory turnover may suggest potential issues such as overstocking, slow-moving inventory, or difficulties in converting inventory into sales. It is essential for Trane Technologies plc to closely monitor and optimize its inventory management practices to improve its turnover ratio and enhance operational efficiency. Further analysis and strategic adjustments may be necessary to address any underlying issues impacting the company's inventory turnover.