American Water Works (AWK)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 62,000 | 52,000 | 41,000 | 38,000 | 44,000 |
| Inventory | US$ in thousands | 103,000 | 112,000 | 98,000 | 57,000 | 47,000 |
| Inventory turnover | 0.60 | 0.46 | 0.42 | 0.67 | 0.94 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $62,000K ÷ $103,000K
= 0.60
The inventory turnover of American Water Works has shown a decreasing trend over the past five years. In December 2020, the inventory turnover was 0.94 times, indicating that the company sold its inventory almost once during the year. However, this ratio decreased to 0.67 in December 2021, suggesting a slower rate of inventory turnover.
Continuing the trend, the inventory turnover further declined to 0.42 in December 2022, indicating a more prolonged period for selling off inventory. Despite a slight improvement to 0.46 in December 2023, the ratio remained relatively low, indicating inefficiencies in managing and selling inventory.
The most recent data point in December 2024 shows a slight improvement to 0.60, suggesting a better turnover rate compared to the previous year but still below the initial level in 2020.
Overall, the declining trend in inventory turnover indicates potential issues such as overstocking, poor sales, or inefficient inventory management practices within American Water Works. This trend warrants further investigation to improve inventory turnover efficiency and optimize working capital utilization.
Peer comparison
Dec 31, 2024