Watts Water Technologies Inc (WTS)
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 | 1,190,100 | 1,194,200 | 1,177,600 | 1,145,100 | 1,095,300 | 1,086,800 | 1,086,800 | 1,094,200 | 1,105,200 | 1,096,500 | 1,087,600 | 1,067,100 | 1,042,100 | 1,001,700 | 966,100 | 903,000 | 883,200 | 879,200 | 879,900 | 918,300 |
| Inventory | US$ in thousands | 392,100 | 420,400 | 426,400 | 423,600 | 399,300 | 386,400 | 421,900 | 401,200 | 375,600 | 422,600 | 431,700 | 402,100 | 370,700 | 352,700 | 313,500 | 279,000 | 263,600 | 273,100 | 283,900 | 279,600 |
| Inventory turnover | 3.04 | 2.84 | 2.76 | 2.70 | 2.74 | 2.81 | 2.58 | 2.73 | 2.94 | 2.59 | 2.52 | 2.65 | 2.81 | 2.84 | 3.08 | 3.24 | 3.35 | 3.22 | 3.10 | 3.28 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,190,100K ÷ $392,100K
= 3.04
The inventory turnover ratio of Watts Water Technologies Inc has shown a declining trend over the past few years. The ratio decreased from 3.28 on March 31, 2020, to 2.76 on June 30, 2024. This indicates that the company is taking longer to sell its inventory, which could potentially be a sign of inefficiency or overstocking.
A lower inventory turnover ratio may suggest that the company is carrying excess inventory relative to its sales levels. This can tie up working capital and increase storage costs, potentially impacting the overall profitability of the business.
It is important for Watts Water Technologies Inc to monitor and manage its inventory levels effectively to improve its inventory turnover ratio. Implementing better inventory management practices, such as optimizing procurement processes, forecasting demand more accurately, and periodically reviewing inventory levels, can help the company increase its inventory turnover and enhance its overall operational efficiency.
Peer comparison
Dec 31, 2024
Dec 31, 2024