Otter Tail Corporation (OTTR)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	507,754	518,479	543,960	492,424	5,153
Inventory	US$ in thousands	148,885	149,701	145,952	148,490	92,165
Inventory turnover		3.41	3.46	3.73	3.32	0.06

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $507,754K ÷ $148,885K
= 3.41

The inventory turnover ratio of Otter Tail Corporation has shown a significant improvement over the years, indicating a more efficient management of its inventory. The ratio was notably low at 0.06 as of December 31, 2020, but experienced a substantial increase to 3.32 by December 31, 2021. This trend continued to rise to 3.73 by December 31, 2022, before slightly decreasing to 3.46 by December 31, 2023, and further to 3.41 by December 31, 2024.

Overall, the increasing trend in inventory turnover suggests that Otter Tail Corporation has been able to sell its inventory more frequently within a given period. This could indicate better inventory management practices, faster sales cycles, or more accurately forecasting customer demand. It also implies that the company is efficiently utilizing its resources and minimizing excess inventory, which can positively impact profitability and liquidity.