Commercial Metals Company (CMC)

Inventory turnover

		Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019
Cost of revenue (ttm)	US$ in thousands	7,296,300	5,400,750	5,521,840	5,573,740	5,681,610	7,745,260	7,817,390	7,789,870	7,624,840	7,389,340	6,957,550	6,558,360	6,141,400	5,654,460	5,229,110	5,124,080	5,089,510	5,168,780	5,406,940	5,516,810
Inventory	US$ in thousands	971,755	1,075,180	1,150,450	1,028,690	1,035,580	1,145,480	1,144,270	1,102,770	1,169,700	1,346,290	1,142,450	1,071,760	935,387	833,101	776,561	653,526	625,393	644,887	714,842	649,681
Inventory turnover		7.51	5.02	4.80	5.42	5.49	6.76	6.83	7.06	6.52	5.49	6.09	6.12	6.57	6.79	6.73	7.84	8.14	8.02	7.56	8.49

August 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $7,296,300K ÷ $971,755K
= 7.51

The inventory turnover for Commercial Metals Company has exhibited fluctuations over the periods in consideration. The ratio indicates how efficiently the company is managing its inventory by measuring the number of times inventory is sold and replaced within a given time frame.

In analyzing the trend, we observe that inventory turnover ranged from a low of 4.80 to a high of 8.49 over the historical periods provided. Generally, a higher inventory turnover is preferred as it signifies that the company is selling through its inventory more quickly.

The company experienced a peak inventory turnover of 8.49 in the third quarter of 2019, indicating efficient inventory management during that period. However, there were fluctuations in subsequent quarters, with the ratio hovering around the range of 5 to 7.84 in the recent periods.

It is important for the company to closely monitor its inventory turnover to ensure optimal management of inventory levels to meet customer demand while also avoiding excess inventory holding costs. Further analysis and comparison with industry benchmarks could provide additional insights into the company's inventory management efficiency.