FirstEnergy Corporation (FE)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 1,726,000 | 1,886,000 | 1,581,000 | 1,484,000 | 1,576,000 |
| Inventory | US$ in thousands | 512,000 | 421,000 | 260,000 | 317,000 | 281,000 |
| Inventory turnover | 3.37 | 4.48 | 6.08 | 4.68 | 5.61 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $1,726,000K ÷ $512,000K
= 3.37
The inventory turnover ratio of Firstenergy Corp. has fluctuated over the past five years, ranging from 9.07 in 2023 to 13.25 in 2021. This ratio indicates how efficiently the company is managing its inventory by showing how many times the company's inventory is sold and replaced over a certain period.
A higher inventory turnover ratio typically suggests that the company is effectively managing its inventory levels, minimizing excess inventory, and generating sales from its inventory at a faster rate. On the other hand, a lower ratio may indicate overstocking or slower sales turnover.
In the case of Firstenergy Corp., the decreasing trend from 2021 to 2023 may imply a slowdown in inventory turnover efficiency, possibly due to factors such as changes in sales patterns, supply chain disruptions, or other operational challenges. Conversely, the increase in the ratio from 2020 to 2021 shows an improvement in inventory management efficiency during that period.
Overall, a consistent and optimal inventory turnover ratio is crucial for maintaining a healthy balance between inventory levels and sales activity, ultimately impacting the company's profitability and operational performance.
Peer comparison
Dec 31, 2023