Allete Inc (ALE)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	217,500	897,400	591,500	420,200	396,600
Inventory	US$ in thousands	154,600	175,400	455,900	97,700	74,200
Inventory turnover		1.41	5.12	1.30	4.30	5.35

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $217,500K ÷ $154,600K
= 1.41

The inventory turnover ratio is a key financial metric that provides insights into how efficiently a company manages its inventory. Based on the data provided for Allete Inc, we can observe fluctuations in the inventory turnover over the years.

In December 31, 2020, the inventory turnover ratio was calculated at 5.35, indicating that Allete Inc was able to sell and replace its inventory 5.35 times during that year. This suggests a relatively efficient inventory management system.

However, in December 31, 2021, the inventory turnover ratio decreased to 4.30, signaling a slight decrease in the efficiency of inventory management compared to the previous year.

The inventory turnover further declined significantly to 1.30 on December 31, 2022, reflecting a potential issue with inventory management efficiency, as the company was able to turn over its inventory less frequently during that year.

The ratio then improved to 5.12 on December 31, 2023, indicating a return to a more efficient inventory turnover rate compared to the previous year.

Lastly, in December 31, 2024, the inventory turnover ratio dropped again to 1.41, highlighting another year of decreased efficiency in managing inventory turnover.

Overall, fluctuations in the inventory turnover ratio for Allete Inc suggest varying levels of effectiveness in managing inventory levels and sales over the years, which is an important aspect to monitor in assessing the company's operational efficiency.