Eversource Energy (ES)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	8,197,200	7,063,940	6,879,400	5,112,030	4,468,090
Inventory	US$ in thousands	594,568	507,300	374,400	267,500	265,600
Inventory turnover		13.79	13.92	18.37	19.11	16.82

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $8,197,200K ÷ $594,568K
= 13.79

To analyze Eversource Energy's inventory turnover, we can observe the trend over the past five years. The inventory turnover ratio is calculated by dividing the cost of goods sold by the average inventory for a specific period.

From the data provided, we can see that Eversource Energy's inventory turnover has fluctuated over the years:

- As of December 31, 2020, the inventory turnover stood at 16.82.
- By December 31, 2021, the ratio had increased to 19.11.
- In December 31, 2022, the ratio slightly decreased to 18.37.
- However, there was a more noticeable drop in inventory turnover by December 31, 2023, with a ratio of 13.92.
- The trend continued with a further decrease in the inventory turnover to 13.79 by December 31, 2024.

A high inventory turnover ratio generally indicates that the company is efficiently managing its inventory by quickly selling off goods. On the other hand, a decreasing ratio could suggest potential issues such as overstocking or poor sales performance. In this case, the declining trend in inventory turnover over the years could indicate a need for the company to review its inventory management practices and sales strategies to optimize efficiency and minimize holding costs.