Trane Technologies plc (TT)
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 | 3,760,900 | 4,380,500 | 3,982,700 | 3,526,100 | 3,143,400 | 3,693,500 | 3,282,600 | 2,937,000 | 2,694,200 | 3,669,800 | 3,182,000 | 2,875,800 | 2,569,900 | 11,887,200 | 11,680,300 | 11,215,600 | 11,037,600 | 11,994,000 | 12,804,100 | 13,977,700 |
| Inventory | US$ in thousands | 1,971,500 | 2,033,400 | 2,203,500 | 2,382,700 | 2,152,100 | 2,191,800 | 2,355,800 | 2,343,700 | 1,993,800 | 1,949,200 | 1,886,900 | 1,872,300 | 1,530,800 | 1,482,800 | 1,386,300 | 1,373,100 | 1,189,200 | 1,229,200 | 1,353,000 | 1,463,700 |
| Inventory turnover | 1.91 | 2.15 | 1.81 | 1.48 | 1.46 | 1.69 | 1.39 | 1.25 | 1.35 | 1.88 | 1.69 | 1.54 | 1.68 | 8.02 | 8.43 | 8.17 | 9.28 | 9.76 | 9.46 | 9.55 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,760,900K ÷ $1,971,500K
= 1.91
Trane Technologies plc's inventory turnover has exhibited a declining trend over the last few years. The company's inventory turnover ratio stood at 9.55 as of March 31, 2020, but gradually decreased to 1.91 as of December 31, 2024. This downward trend indicates that the company is taking longer to sell its inventory.
A high inventory turnover ratio is generally viewed favorably as it suggests efficient management of inventory levels and a quick turnover of goods. Conversely, a declining ratio may signal potential issues such as obsolete inventory, overstocking, or challenges in selling products.
Trane Technologies plc's decreasing inventory turnover ratio may raise concerns about its inventory management practices and the effectiveness of its sales strategies. It is important for the company to monitor and optimize its inventory levels to improve this ratio and enhance its overall operational efficiency and profitability.