The AES Corporation (AES)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 9,964,000 | 10,164,000 | 10,069,000 | 8,430,000 | 6,967,000 |
| Inventory | US$ in thousands | 593,000 | 712,000 | 1,055,000 | 604,000 | 461,000 |
| Inventory turnover | 16.80 | 14.28 | 9.54 | 13.96 | 15.11 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $9,964,000K ÷ $593,000K
= 16.80
The inventory turnover ratio for The AES Corporation has shown fluctuation over the years under consideration. In December 2020, the inventory turnover was 15.11, indicating that the company's inventory turned over approximately 15 times during that year. However, by December 2022, the inventory turnover decreased to 9.54, suggesting a decrease in the efficiency of inventory management.
In December 2021, 2023, and 2024, the inventory turnover improved to 13.96, 14.28, and 16.80 respectively. These higher turnover ratios indicate that the company was able to sell its inventory more frequently in these years, reflecting a more efficient management of inventory levels.
Overall, it is essential for The AES Corporation to closely monitor its inventory turnover ratio to ensure optimal inventory management and to strike a balance between having enough inventory to meet demand and avoiding excess inventory that can tie up working capital.