Liberty Oilfield Services Inc (LBRT)

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	3,589,816	3,691,201	3,705,986	3,569,277	3,334,903	3,063,834	2,764,495	2,560,302	2,378,077	1,963,806	1,497,411	1,063,273	962,690	1,076,706	1,364,858	1,699,124	1,724,005	1,756,358	1,750,950	1,780,688
Inventory	US$ in thousands	205,865	211,747	201,069	196,675	214,454	185,647	163,652	139,721	134,593	116,795	120,015	129,338	118,568	76,989	81,167	87,616	88,547	86,985	86,809	74,348
Inventory turnover		17.44	17.43	18.43	18.15	15.55	16.50	16.89	18.32	17.67	16.81	12.48	8.22	8.12	13.99	16.82	19.39	19.47	20.19	20.17	23.95

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $3,589,816K ÷ $205,865K
= 17.44

Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory. In the case of Liberty Energy Inc, the inventory turnover ratio has been relatively stable over the past eight quarters, ranging from 14.68 to 17.34.

A consistently high inventory turnover ratio indicates that Liberty Energy Inc is effectively managing its inventory by quickly selling and replacing goods. This suggests efficient inventory control and effective sales strategies. However, it is important to note that a very high inventory turnover ratio could also indicate possible understocking issues, leading to potential stockouts and lost sales opportunities.

Overall, Liberty Energy Inc's inventory turnover ratios are within a reasonable range, reflecting good inventory management practices. It is essential for the company to continue monitoring and optimizing its inventory turnover to ensure a healthy balance between carrying costs and sales efficiency.