Targa Resources Inc (TRGP)

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	12,995,700	13,204,000	13,203,900	12,768,200	12,275,500	12,420,200	13,992,400	16,908,600	17,978,000	19,113,300	18,357,300	15,961,000	14,600,300	11,787,000	9,456,400	7,600,600	5,975,500	5,954,900	6,020,400	6,554,100
Inventory	US$ in thousands	334,300	414,900	320,600	224,500	371,500	536,200	312,300	156,200	393,800	471,300	202,200	97,500	153,400	316,800	65,600	51,600	181,500	261,700	219,300	100,200
Inventory turnover		38.87	31.82	41.18	56.87	33.04	23.16	44.80	108.25	45.65	40.55	90.79	163.70	95.18	37.21	144.15	147.30	32.92	22.75	27.45	65.41

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $12,995,700K ÷ $334,300K
= 38.87

The inventory turnover of Targa Resources Inc has fluctuated over the period from March 31, 2020, to December 31, 2024. The inventory turnover ratio indicates how efficiently the company is managing its inventory by showing how many times on average the inventory is sold and replaced over a specific period.

Initially, the inventory turnover ratio was relatively high at 65.41 on March 31, 2020, indicating that the company was selling and restocking its inventory frequently. However, this ratio declined to 27.45 on June 30, 2020, and continued to decrease to 22.75 on September 30, 2020. This downward trend suggests potential issues with managing inventory levels efficiently during that period.

The inventory turnover ratio saw a significant improvement in the following quarters, reaching a peak of 163.70 on March 31, 2022, and remaining high at 144.15 on June 30, 2021. This surge in inventory turnover indicates a more efficient inventory management system, where the company was able to sell and replace its inventory rapidly.

Subsequently, the inventory turnover ratio experienced some fluctuations but generally remained at higher levels compared to the earlier periods. For instance, on March 31, 2024, the inventory turnover ratio was 56.87, signifying a decent level of inventory efficiency.

Overall, the analysis of Targa Resources Inc's inventory turnover indicates periods of both improvement and potential challenges in managing inventory effectively. It is essential for the company to sustain higher inventory turnover ratios to optimize its working capital and operational efficiency.