Diamondback Energy Inc (FANG)

Inventory turnover

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	2,906,000	3,556,000	3,431,000	3,020,000	2,797,000	2,536,000	3,117,000	3,020,000	2,910,000	2,211,000	2,172,000	2,103,000	1,908,000	2,365,000	2,160,000	2,014,000	2,169,000	2,362,000	2,465,000	2,513,000
Inventory	US$ in thousands	116,000	126,000	55,000	57,000	63,000	70,000	66,000	69,000	67,000	59,000	65,000	62,000	62,000	53,000	33,000	52,000	33,000	33,000	34,000	36,000
Inventory turnover		25.05	28.22	62.38	52.98	44.40	36.23	47.23	43.77	43.43	37.47	33.42	33.92	30.77	44.62	65.45	38.73	65.73	71.58	72.50	69.81

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $2,906,000K ÷ $116,000K
= 25.05

Diamondback Energy Inc's inventory turnover ratio indicates the efficiency with which the company manages its inventory levels. The inventory turnover ratio is calculated by dividing the cost of goods sold by the average inventory during a period. A higher inventory turnover ratio typically suggests that a company is efficiently managing its inventory by quickly selling off its products.

Analyzing the data provided, Diamondback Energy Inc's inventory turnover fluctuated over the reported period. In March 2020, the inventory turnover was 69.81 times, indicating that the company's inventory was turned over almost 70 times during that period. The ratio gradually increased to 72.50 in June 2020 before slightly decreasing to 65.73 by December 2020.

From March 2021 to September 2021, there was a significant decrease in inventory turnover, with the ratio dropping from 38.73 to 44.62. This could indicate potential issues with inventory management during that period. However, the ratio saw a slight recovery to 43.43 by December 2022.

Notably, there were fluctuations in the inventory turnover ratio throughout the reporting period, with values ranging from a low of 25.05 in December 2024 to a high of 62.38 in June 2024. This variability may suggest changes in sales volumes, production levels, or inventory management strategies within the company.

Overall, Diamondback Energy Inc's inventory turnover ratios exhibit varying levels of efficiency in managing its inventory. Analysts may further investigate the reasons behind the fluctuations and trends in the inventory turnover to gain insights into the company's operations and financial performance.