Northwest Natural Gas Co (NWN)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	192,148	177,161	169,022	152,958	171,357
Inventory	US$ in thousands	138,171	110,596	76,662	60,691	60,485
Inventory turnover		1.39	1.60	2.20	2.52	2.83

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $192,148K ÷ $138,171K
= 1.39

The inventory turnover ratio for Northwest Natural Holding Co has shown a fluctuating trend over the past five years. It decreased from 4.30 in 2019 to 4.86 in 2020, before slightly declining again to 5.10 in 2021. However, for the last two years, there has been a downward trend with the ratio decreasing to 4.93 in 2022 and further dropping to 4.44 in 2023.

A higher inventory turnover ratio typically indicates that the company is efficiently managing its inventory by selling goods quickly and not letting them sit idle for long periods. On the other hand, a decreasing ratio may suggest inefficiencies in inventory management, such as overstocking or slow-moving inventory.

Northwest Natural Holding Co should closely monitor its inventory turnover ratio to ensure optimal inventory management practices and avoid potential issues such as carrying excess inventory that ties up capital or obsolescence risks.