Allete Inc (ALE)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	894,000	916,900	925,300	781,200	587,300	465,000	438,900	415,900	415,300	401,000	398,900	395,900	390,700	137,800	136,300	135,200	150,600	257,300	283,300	305,800
Inventory	US$ in thousands	175,400	180,300	194,300	346,900	455,900	472,200	355,800	196,600	97,700	89,600	88,100	74,000	74,200	74,800	82,000	79,000	72,800	84,600	78,200	73,800
Inventory turnover		5.10	5.09	4.76	2.25	1.29	0.98	1.23	2.12	4.25	4.48	4.53	5.35	5.27	1.84	1.66	1.71	2.07	3.04	3.62	4.14

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $894,000K ÷ $175,400K
= 5.10

Inventory turnover measures how efficiently a company manages its inventory by indicating the number of times it sells and replaces its inventory within a specific period. A higher turnover ratio suggests that the company is effectively selling its goods, while a lower ratio could indicate overstocking or slow sales.

From the data provided, Allete, Inc.'s inventory turnover has shown a fluctuating trend over the past eight quarters. In Q4 2023 and Q3 2023, the company achieved relatively high turnover ratios of 5.45 and 5.55, respectively, indicating efficient management of its inventory during those periods. This may suggest that Allete, Inc. successfully converted its inventory into sales multiple times within those quarters.

On the other hand, Q1 2023 and Q4 2022 had lower turnover ratios of 2.60 and 1.60, respectively, signaling a slower pace of inventory turnover in those periods. This could imply potential challenges in converting inventory into sales quickly or efficiently during those quarters.

Overall, Allete, Inc.'s inventory turnover has shown variability, with some quarters demonstrating stronger performance in inventory management than others. It is essential for the company to closely monitor and optimize its inventory levels to ensure efficient operations and maximize profitability. Tracking inventory turnover over time can help identify trends and areas that may require improvement to enhance overall efficiency and performance.