Westinghouse Air Brake Technologies Corp (WAB)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 8,452,000 | 7,330,000 | 6,974,000 | 6,840,400 | 7,490,000 |
| Inventory | US$ in thousands | 2,284,000 | 2,034,000 | 1,689,000 | 1,642,000 | 1,773,100 |
| Inventory turnover | 3.70 | 3.60 | 4.13 | 4.17 | 4.22 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $8,452,000K ÷ $2,284,000K
= 3.70
Inventory turnover measures how effectively a company manages its inventory by calculating how many times during a period the company sells and replaces its inventory. In the case of Westinghouse Air Brake Technologies Corp, the inventory turnover has fluctuated over the past five years.
The inventory turnover ratio has decreased slightly from 3.34 in 2019 to 2.95 in 2023. This downward trend indicates that the company took longer to sell and replace its inventory in 2023 compared to 2019. Although the ratio decreased in 2023, it remained relatively stable around the 3 mark over the years 2021, 2020, and 2019.
A lower inventory turnover ratio may suggest potential issues like slow-moving inventory or overstocking, leading to higher carrying costs and obsolescence risks. On the other hand, a high inventory turnover ratio may indicate strong sales or efficient inventory management.
Further analysis and comparison with industry benchmarks would provide a clearer understanding of Westinghouse Air Brake Technologies Corp's inventory management efficiency and help identify areas for improvement.
Peer comparison
Dec 31, 2023