NOV Inc. (NOV)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	6,750,000	5,903,000	4,750,000	5,656,000	7,634,000
Inventory	US$ in thousands	2,151,000	1,813,000	1,331,000	1,408,000	2,197,000
Inventory turnover		3.14	3.26	3.57	4.02	3.47

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $6,750,000K ÷ $2,151,000K
= 3.14

NOV Inc has shown a fluctuating trend in its inventory turnover ratio over the past five years. The inventory turnover ratio indicates the efficiency of the company in managing its inventory levels. A higher inventory turnover ratio suggests that the company is selling its inventory more quickly and efficiently.

In 2023, the inventory turnover ratio decreased to 3.14 from 3.26 in 2022, which may indicate that the company took longer to sell its inventory compared to the previous year. This could potentially be due to factors such as changes in consumer demand, production issues, or inefficient inventory management.

Compared to 2021 and 2019, where the inventory turnover ratios were 3.57 and 3.47 respectively, there has been a downward trend in the efficiency of inventory turnover. This implies that NOV Inc may have experienced challenges in effectively managing and selling its inventory in 2023.

It is important for NOV Inc to closely monitor its inventory turnover ratio and implement strategies to improve efficiency in managing its inventory levels, such as optimizing production processes, reducing excess inventory, and aligning inventory levels with customer demand.