Badger Meter Inc (BMI)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 497,374 | 427,154 | 345,598 | 299,714 | 257,295 |
| Inventory | US$ in thousands | 143,408 | 153,674 | 119,856 | 99,611 | 81,586 |
| Inventory turnover | 3.47 | 2.78 | 2.88 | 3.01 | 3.15 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $497,374K ÷ $143,408K
= 3.47
Badger Meter Inc's inventory turnover has shown a gradual decline over the years. Starting at 3.15 in December 2020, it decreased to 3.01 by December 2021, further dropping to 2.88 by December 2022, and then to 2.78 by December 2023. However, there was a notable improvement in December 2024, where the inventory turnover increased to 3.47.
The declining trend in inventory turnover could suggest potential issues such as overstocking, slow-moving inventory, or inefficient inventory management. It indicates that the company is selling its inventory at a slower pace compared to previous years, which could tie up capital and lead to storage costs.
The sudden increase in inventory turnover in December 2024 is a positive sign, as it indicates that the company was able to sell its inventory more efficiently during that period. This improvement may reflect better demand forecasting, streamlined operations, or effective inventory control measures.
Overall, a consistent analysis of inventory turnover is crucial for identifying operational efficiency, inventory management effectiveness, and potential financial risks related to inventory levels. Further investigation into the reasons behind the fluctuations in inventory turnover can provide valuable insights for management decision-making.
Peer comparison
Dec 31, 2024