MGE Energy Inc (MGEE)

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	22,923	21,342	20,642	20,242	19,542	18,035	18,935	19,235	19,535	20,360	20,160	19,760	18,460	18,403	18,728	19,228	21,028	2,325	1,900	1,200
Inventory	US$ in thousands	72,648	72,416	71,882	69,434	74,275	75,396	60,736	42,862	51,960	50,527	46,061	38,685	47,265	49,423	46,082	40,724	45,282	47,760	40,582	32,278
Inventory turnover		0.32	0.29	0.29	0.29	0.26	0.24	0.31	0.45	0.38	0.40	0.44	0.51	0.39	0.37	0.41	0.47	0.46	0.05	0.05	0.04

December 31, 2023 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $22,923K ÷ $72,648K
= 0.32

Inventory turnover measures how efficiently a company manages its inventory by indicating how many times during a period it sells and replaces its inventory. For MGE Energy Inc, the inventory turnover has been fluctuating over time. In recent periods, the trend shows a slight increase from 0.24 in Sep 2022 to 0.32 in Dec 2023.

A lower inventory turnover ratio may suggest overstocking or slow-moving inventory, which could tie up capital and lead to increased carrying costs. Conversely, a higher turnover ratio indicates that inventory is moving quickly, which can be a positive sign of strong sales and efficient inventory management.

In the case of MGE Energy Inc, the inventory turnover ratio is relatively low, indicating that the company may be holding onto its inventory for a longer period before selling it. It would be beneficial for the company to monitor and potentially improve its inventory management practices to optimize its working capital and enhance its overall operational efficiency.