NewJersey Resources Corporation (NJR)

Inventory turnover

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	18,188	17,076	17,076	17,064	17,021	17,069	16,987	16,904	16,815	93,311	185,493	186,227	187,137	102,996	11,630	11,738	11,593	-1,346,286	-1,057,803	-513,834
Inventory	US$ in thousands	237,609	163,879	111,357	224,575	226,523	185,861	108,524	275,994	293,968	225,839	88,155	262,033	213,167	145,271	93,677	182,118	187,910	142,090	94,172	201,512
Inventory turnover		0.08	0.10	0.15	0.08	0.08	0.09	0.16	0.06	0.06	0.41	2.10	0.71	0.88	0.71	0.12	0.06	0.06	-9.47	-11.23	-2.55

September 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $18,188K ÷ $237,609K
= 0.08

The inventory turnover ratio of NewJersey Resources Corporation has varied significantly over the past few quarters. The ratio measures how efficiently the company is managing its inventory by indicating how many times the inventory is sold and replaced during a specific period.

In the latest quarter ending September 30, 2024, the inventory turnover ratio was 0.08, which denotes that the company turned over its inventory 0.08 times during that period. This indicates a lower efficiency in managing its inventory compared to the previous quarter.

Looking at the trend over the past few quarters, there seems to be fluctuation in the inventory turnover ratio. For example, in March 2022, there was a noticeable spike in the ratio to 2.10, which suggests a significant improvement in inventory management efficiency. However, this spike was followed by a decline in the ratio in subsequent quarters.

It is important to note that extremely low or negative inventory turnover ratios, such as seen in December 2019 and September 2020, signify potential issues like excess inventory levels, obsolete inventory, or slow-moving inventory. These situations can tie up company resources and lead to additional holding costs.

In conclusion, NewJersey Resources Corporation should continue to monitor and analyze its inventory turnover ratio to ensure efficient inventory management practices, reduce holding costs, and optimize working capital utilization.