Allete Inc (ALE)

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	213,900	567,400	553,600	706,900	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
Inventory	US$ in thousands	154,600	166,600	184,300	182,700	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
Inventory turnover		1.38	3.41	3.00	3.87	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

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $213,900K ÷ $154,600K
= 1.38

The inventory turnover ratio measures how efficiently a company manages its inventory by showing how many times inventory is sold and replaced over a specific period. A higher turnover ratio generally indicates better inventory management.

Analyzing Allete Inc's inventory turnover over the past few years, we observe fluctuations in the ratio. The company's inventory turnover was relatively low in early 2020, around 1.7 times, indicating slower inventory movement. However, by the end of 2020 and throughout 2021, the turnover ratio significantly improved, reaching above 4 times.

Subsequently, in the following periods, the inventory turnover ratio decreased back to around 2 to 3 times, indicating a potential slowdown in inventory management efficiency. Notably, the ratio dropped to below 1 in the third quarter of 2022, which may suggest inventory management challenges during that period.

Overall, Allete Inc's inventory turnover has shown variability, with periods of strong inventory management followed by decreases in efficiency. It is crucial for the company to monitor and potentially address factors impacting inventory turnover to maintain optimal management practices.