NOV Inc. (NOV)

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	6,750,000	6,534,000	6,338,000	6,120,000	5,903,000	5,588,000	5,223,000	4,991,000	4,750,000	4,828,000	4,917,000	5,090,000	5,656,000	6,168,000	6,898,000	7,609,000	7,634,000	7,718,000	7,504,000	7,185,000
Inventory	US$ in thousands	2,151,000	2,277,000	2,199,000	2,036,000	1,813,000	1,755,000	1,591,000	1,440,000	1,331,000	1,325,000	1,322,000	1,357,000	1,408,000	1,745,000	1,929,000	2,032,000	2,197,000	2,537,000	2,858,000	3,131,000
Inventory turnover		3.14	2.87	2.88	3.01	3.26	3.18	3.28	3.47	3.57	3.64	3.72	3.75	4.02	3.53	3.58	3.74	3.47	3.04	2.63	2.29

December 31, 2023 calculation

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

Inventory turnover is a key financial ratio that measures how efficiently a company manages its inventory. It is calculated by dividing the cost of goods sold by the average inventory balance. A higher inventory turnover ratio indicates that a company is selling its inventory quickly and efficiently.

Analyzing the inventory turnover ratios of NOV Inc over the past eight quarters, we observe some fluctuations in the ratio. In Q4 2023, the inventory turnover ratio was 3.14, slightly higher than the previous quarter at 2.87. This indicates that NOV Inc was able to sell its inventory more rapidly in the most recent quarter.

Looking at the trend over the past year, NOV Inc's inventory turnover has been relatively stable, ranging between 2.87 and 3.47. This suggests that the company has been effectively managing its inventory levels and turning over its inventory efficiently.

It is important to note that a high inventory turnover ratio may imply strong sales, but it could also indicate potential stockouts or inadequate inventory levels. On the other hand, a low inventory turnover ratio may suggest excess inventory or slow-moving stock, which can tie up capital and increase holding costs.

Overall, NOV Inc's inventory turnover ratios reflect a consistent level of efficiency in managing its inventory levels and converting them into sales. Further analysis of industry benchmarks and comparison with competitors may provide deeper insights into the company's inventory management performance.