Avista Corporation (AVA)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	10,735	-6,540	7,024	13,811	41,432
Inventory	US$ in thousands	159,984	107,674	84,733	67,451	66,583
Inventory turnover		0.07	-0.06	0.08	0.20	0.62

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $10,735K ÷ $159,984K
= 0.07

Over the past five years, Avista Corp.'s inventory turnover ratio has shown some fluctuations. In 2023, the inventory turnover ratio stood at 4.39 times, indicating that the company converted its inventory into sales 4.39 times during the year. This represents a decrease from the previous year, where the inventory turnover was 6.83.

A declining inventory turnover ratio may suggest that Avista Corp. is holding onto its inventory for a longer period before selling it, which could tie up capital and potentially signal inefficiencies in the company's operations. On the other hand, a high inventory turnover ratio usually indicates that the company is efficiently managing its inventory levels, turning over its inventory frequently, and avoiding excessive stockpiling.

In comparison to the earlier years, the 2023 inventory turnover is relatively lower, suggesting a potential change in Avista Corp.'s inventory management strategy or market dynamics impacting the company's inventory practices. It would be essential for the company to further analyze the reasons behind this decline and take appropriate measures to optimize its inventory management processes for improved operational efficiency and financial performance.