Vontier Corp (VNT)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 768,500 | 785,000 | 2,577,600 | 2,363,800 | 2,094,000 |
| Inventory | US$ in thousands | 337,800 | 296,600 | 346,000 | 287,000 | 233,700 |
| Inventory turnover | 2.28 | 2.65 | 7.45 | 8.24 | 8.96 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $768,500K ÷ $337,800K
= 2.28
Vontier Corp's inventory turnover has exhibited a declining trend over the period from December 31, 2020, to December 31, 2024. The inventory turnover ratio decreased from 8.96 in 2020 to 2.28 in 2024. This downward trend indicates that the company is taking longer to sell its inventory, which could be a cause for concern as it may lead to excess inventory levels and potential obsolescence.
A higher inventory turnover ratio is typically preferred as it suggests that a company is efficiently managing its inventory by quickly selling and replenishing its stock. The decreasing trend in Vontier Corp's inventory turnover may signify inefficiencies in inventory management, potentially resulting in higher storage costs and impacting the company's profitability.
Further investigation into the reasons behind this decline in inventory turnover is advisable to identify any underlying issues within the company's operations and supply chain management. Addressing these issues could help Vontier Corp improve its inventory turnover and overall operational efficiency.
Peer comparison
Dec 31, 2024