Black Hills Corporation (BKH)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	71,600	71,233	64,318	60,464	56,727
Inventory	US$ in thousands	160,900	207,400	150,979	117,400	117,172
Inventory turnover		0.44	0.34	0.43	0.52	0.48

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $71,600K ÷ $160,900K
= 0.44

Black Hills Corporation's inventory turnover has shown a generally increasing trend over the past five years, indicating more efficient management of inventory. The inventory turnover ratio increased from 4.87 in 2019 to 6.11 in 2023. This suggests that the company is selling its inventory more frequently within a year, which is a positive sign of operational efficiency.

A higher inventory turnover ratio signifies that Black Hills Corporation is able to quickly sell its inventory, reducing the risk of obsolete or outdated inventory. It also indicates effective inventory management practices, such as accurate demand forecasting and optimizing inventory levels.

Overall, the improving trend in inventory turnover for Black Hills Corporation suggests that the company is effectively managing its inventory to meet customer demand while minimizing carrying costs and improving cash flow.