SkyWest Inc (SKYW)

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	1,446,547	1,410,128	1,365,710	1,333,146	1,316,148	1,421,256	1,395,966	1,362,087	1,326,744	1,135,502	1,177,970	1,664,798	2,036,795	2,707,747	2,935,008	2,684,278	2,922,598	2,947,816	3,235,628	3,555,024
Inventory	US$ in thousands	139,002	136,480	134,382	129,866	127,114	127,129	123,572	122,426	123,209	118,728	115,142	110,041	104,093	98,763	97,987	95,380	91,196	92,350	97,782	104,800
Inventory turnover		10.41	10.33	10.16	10.27	10.35	11.18	11.30	11.13	10.77	9.56	10.23	15.13	19.57	27.42	29.95	28.14	32.05	31.92	33.09	33.92

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,446,547K ÷ $139,002K
= 10.41

The inventory turnover ratio measures how efficiently a company is managing its inventory by indicating how many times a company sells and replaces its inventory over a specific period.

Analyzing the inventory turnover ratio of SkyWest Inc over the past few years, we observe a decreasing trend. In March 2020, the inventory turnover was 33.92, indicating that the company sold and replaced its inventory approximately 33.92 times during the year. However, this ratio gradually decreased to 10.41 by December 2024.

A decreasing inventory turnover ratio could imply that the company is holding onto excess inventory, which could tie up working capital and lead to potential obsolescence. This may suggest inefficiencies in inventory management, potentially impacting the company's profitability and liquidity.

It is essential for SkyWest Inc to closely monitor its inventory turnover ratio and take necessary actions to optimize inventory levels, streamline operations, and improve supply chain management to enhance overall efficiency and profitability.