American Water Works (AWK)

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	62,000	53,000	52,000	52,000	52,000	40,000	41,000	41,000	41,000	47,000	480,000	908,000	1,324,000	1,330,000	1,313,000	1,273,000	1,237,000	1,235,000	1,211,000	1,192,000
Inventory	US$ in thousands	103,000	105,000	111,000	115,000	112,000	111,000	109,000	103,000	98,000	93,000	85,000	71,000	57,000	53,000	52,000	52,000	47,000	49,000	51,000	50,000
Inventory turnover		0.60	0.50	0.47	0.45	0.46	0.36	0.38	0.40	0.42	0.51	5.65	12.79	23.23	25.09	25.25	24.48	26.32	25.20	23.75	23.84

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $62,000K ÷ $103,000K
= 0.60

American Water Works' inventory turnover has been gradually declining from a high of 26.32 in December 2020 to 0.60 in December 2024. The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times during a period the company sells and replaces its inventory. The decreasing trend in inventory turnover suggests that American Water Works may be experiencing challenges in effectively managing and selling its inventory. A declining inventory turnover ratio could indicate potential issues such as overstocking, slow-moving inventory, or a decrease in sales. The significant drop in inventory turnover from March 2024 to December 2024, from 0.45 to 0.60, may signal worsening inefficiencies in managing inventory levels and sales. Further analysis and investigation into the company's inventory management practices and potential causes for the declining inventory turnover are warranted to address these concerns.