Itron Inc (ITRI)
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 | 1,835,145 | 1,769,486 | 1,685,335 | 1,658,030 | 1,619,297 | 1,718,205 | 1,780,316 | 1,779,375 | 1,798,195 | 1,736,178 | 1,820,970 | 1,847,364 | 1,930,113 | 2,033,017 | 2,049,880 | 2,142,821 | 2,167,847 | 2,132,646 | 2,105,310 | 2,073,849 |
| Inventory | US$ in thousands | 283,686 | 276,099 | 267,042 | 265,122 | 228,701 | 203,612 | 174,522 | 171,259 | 165,799 | 175,432 | 179,347 | 169,412 | 182,377 | 205,178 | 226,564 | 221,850 | 227,896 | 231,081 | 229,910 | 221,097 |
| Inventory turnover | 6.47 | 6.41 | 6.31 | 6.25 | 7.08 | 8.44 | 10.20 | 10.39 | 10.85 | 9.90 | 10.15 | 10.90 | 10.58 | 9.91 | 9.05 | 9.66 | 9.51 | 9.23 | 9.16 | 9.38 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,835,145K ÷ $283,686K
= 6.47
The inventory turnover ratio measures how efficiently a company manages its inventory by comparing the cost of goods sold to the average inventory levels. In the case of Itron Inc., the inventory turnover ratio has been consistently declining over the past eight quarters, from 8.15 in Q1 2022 to 5.15 in Q4 2023.
A decreasing inventory turnover ratio suggests that Itron Inc. is taking longer to sell its inventory, which may indicate overstocking, obsolete inventory, or declining demand for its products. This trend can tie up capital in unsold inventory and potentially lead to higher storage and holding costs.
It is important for Itron Inc. to closely monitor its inventory turnover ratio and take proactive measures to address the factors causing the decline. This may involve optimizing inventory management practices, improving forecasting accuracy, controlling production levels, and adjusting product offerings to better align with customer demand.
Overall, the decreasing trend in inventory turnover for Itron Inc. warrants further analysis and strategic actions to enhance operational efficiency and maintain a healthy balance between inventory levels and sales.
Peer comparison
Dec 31, 2023
Dec 31, 2023