Evergy Inc. Common Stock (EVRG)

Inventory turnover

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Cost of revenue (ttm)	US$ in thousands	1,559,600	1,499,400	1,462,900	1,425,500	1,390,600	1,380,600	1,361,900	1,352,600	1,335,900	1,294,200	1,282,000	1,271,400	1,268,000	1,280,600	1,279,200	1,273,700	1,269,800	1,061,900	1,093,900	1,059,200
Inventory	US$ in thousands	776,200	739,900	729,400	724,100	672,900	615,200	636,500	612,700	566,700	545,000	538,100	492,300	504,500	512,100	520,300	498,900	481,600	454,400	488,700	466,500
Inventory turnover		2.01	2.03	2.01	1.97	2.07	2.24	2.14	2.21	2.36	2.37	2.38	2.58	2.51	2.50	2.46	2.55	2.64	2.34	2.24	2.27

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,559,600K ÷ $776,200K
= 2.01

Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory by assessing the number of times the company sells and replaces its inventory during a specific period.

Analyzing Evergy Inc's inventory turnover over the last eight quarters, we can observe some fluctuations. The inventory turnover ratio has ranged from 1.93 to 2.71, with the highest turnover occurring in Q4 2022 and the lowest in Q4 2023. The general trend shows a gradual decrease in inventory turnover from Q4 2022 to Q4 2023, indicating a potential slowdown in inventory management efficiency.

A high inventory turnover ratio typically indicates strong sales and efficient inventory management, while a low ratio may suggest overstocking or slow sales. In the case of Evergy Inc, the overall trend and the current ratio of 1.93 in Q4 2023 suggest a decrease in efficiency in managing inventory compared to previous quarters. This could be a cause for concern as it may lead to higher carrying costs, potential write-downs, and reduced profitability.

It is essential for Evergy Inc to closely monitor its inventory turnover and take appropriate measures to improve efficiency, such as better forecasting, tighter inventory controls, and optimizing supply chain management. By doing so, the company can strengthen its financial position and enhance overall operational performance.