Essential Utilities Inc (WTRG)

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	1,044,709	1,069,399	1,069,544	978,099	1,016,029	1,165,183	1,204,977	1,239,660	1,215,644	1,080,178	1,041,619	1,003,907	890,842	844,490	832,565	832,177	694,356	529,670	458,774	373,195
Inventory	US$ in thousands	93,930	105,230	84,541	66,796	112,667	127,445	108,516	95,907	199,735	229,712	128,610	59,062	109,560	113,810	63,382	34,822	58,401	66,615	50,084	33,917
Inventory turnover		11.12	10.16	12.65	14.64	9.02	9.14	11.10	12.93	6.09	4.70	8.10	17.00	8.13	7.42	13.14	23.90	11.89	7.95	9.16	11.00

December 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $1,044,709K ÷ $93,930K
= 11.12

Essential Utilities Inc's inventory turnover ratio has fluctuated over the past few years, ranging from a low of 4.70 to a high of 23.90. The ratio measures how efficiently the company manages its inventory by indicating how many times the inventory is sold and replaced within a specific period. A higher inventory turnover ratio generally reflects better inventory management and may indicate that the company is effectively selling its products.

For Essential Utilities Inc, the inventory turnover ratio showed a significant increase from March 31, 2021, to a peak of 23.90, suggesting that the company was selling and replenishing its inventory rapidly during that period. However, the ratio decreased in the subsequent quarters but remained relatively stable between 9.14 and 14.64.

A sudden drop in inventory turnover ratio, such as the decline observed on September 30, 2022, could indicate potential issues with sales, overstocking, or inefficiencies in inventory management. Overall, Essential Utilities Inc should aim to maintain a healthy balance in its inventory turnover ratio to ensure optimal efficiency in its operations and profitability.