Northwest Natural Gas Co (NWN)

Inventory turnover

		Dec 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	463,425	731,742	846,409	869,025	890,173	838,545	813,605	776,303	696,128	629,674	614,873	570,649	531,281	496,140	488,302	481,038	473,175	475,947	474,322	463,764
Inventory	US$ in thousands	106,954	108,651	107,332	99,874	112,571	94,585	67,502	41,392	87,096	98,725	65,983	33,377	57,262	59,997	39,024	26,237	42,691	45,082	44,009	34,390
Inventory turnover		4.33	6.73	7.89	8.70	7.91	8.87	12.05	18.75	7.99	6.38	9.32	17.10	9.28	8.27	12.51	18.33	11.08	10.56	10.78	13.49

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $463,425K ÷ $106,954K
= 4.33

The inventory turnover ratio for Northwest Natural Gas Co has shown fluctuations over the reported periods. The ratio measures how efficiently the company manages its inventory by analyzing how many times the company sells and replaces its inventory within a specific timeframe.

From March 31, 2020, to June 30, 2021, Northwest Natural Gas Co's inventory turnover ratio ranged from 10.78 to 18.33, indicating a relatively efficient management of inventory during this period. However, there was a significant decrease in inventory turnover from September 30, 2021, to December 31, 2024, with the ratio fluctuating between 4.33 and 9.32. This suggests a decrease in the speed at which the company is selling and replacing its inventory.

The lower inventory turnover ratios in the latter periods may indicate potential issues such as overstocking of inventory, slow-moving inventory, or inefficiencies in inventory management. A low inventory turnover ratio could also imply potential liquidity concerns or decreased sales volume relative to the level of inventory held.

It is important for Northwest Natural Gas Co to closely monitor its inventory turnover ratio and identify the underlying reasons for the fluctuations to address any inefficiencies in inventory management and improve overall operational performance. Additionally, the company may need to optimize its inventory levels to ensure a balance between maintaining sufficient inventory for operations and avoiding excess holding costs.