MGE Energy Inc (MGEE)
Inventory turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 22,823 | 19,542 | 19,535 | 18,460 | 19,998 |
| Inventory | US$ in thousands | 72,648 | 74,275 | 51,960 | 47,265 | 45,282 |
| Inventory turnover | 0.31 | 0.26 | 0.38 | 0.39 | 0.44 |
December 31, 2023 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $22,823K ÷ $72,648K
= 0.31
MGE Energy Inc's inventory turnover has fluctuated over the past five years. The company's inventory turnover was 0.31 in 2023, indicating that the company's inventory was turned over approximately 0.31 times during the year. This suggests a decrease from the previous year's inventory turnover of 0.26.
A lower inventory turnover ratio may imply inefficiency in managing inventory levels or a decline in sales relative to the inventory levels. It could also indicate overstocking or obsolete inventory issues.
Comparing to the years prior to 2022, MGE Energy Inc had a higher inventory turnover ratio which indicates that the company was able to sell its inventory more frequently in those years. However, the decreasing trend since 2022 could be a signal for the company to reassess its inventory management practices to improve efficiency and profitability.
Further analysis would be needed to understand the reasons behind the decrease in inventory turnover and to make appropriate recommendations for improving this ratio in the future.