American States Water Company (AWR)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	189,845	181,444	180,799	183,580	174,506
Inventory	US$ in thousands	17,574	14,623	12,163	8,619	6,429
Inventory turnover		10.80	12.41	14.86	21.30	27.14

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $189,845K ÷ $17,574K
= 10.80

American States Water Co. has shown a declining trend in inventory turnover over the past five years. The inventory turnover ratio decreased from 14.43 in 2019 to 6.06 in 2023. This indicates that the company's efficiency in managing its inventory has decreased over the years.

A lower inventory turnover ratio suggests that American States Water Co. is holding onto its inventory for a longer period, which could lead to increased storage costs and potential obsolescence of inventory. It may also indicate inefficiencies in managing inventory levels or challenges in matching inventory with sales demand.

Overall, the decreasing inventory turnover ratio for American States Water Co. warrants further investigation into the company's inventory management practices to identify areas of improvement and enhance operational efficiency.