Commercial Metals Company (CMC)

Inventory turnover

		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	Aug 31, 2019	May 31, 2019
Cost of revenue (ttm)	US$ in thousands	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	5,492,250	5,296,830
Inventory	US$ in thousands	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	692,368	807,593
Inventory turnover		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	7.93	6.56

February 29, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $5,521,840K ÷ $1,150,450K
= 4.80

Commercial Metals Company's inventory turnover has shown some fluctuations over the past 20 reporting periods. The inventory turnover ratios have ranged from a low of 4.80 to a high of 8.49. A general upward trend can be observed from the earlier periods to the most recent ones.

The inventory turnover ratio indicates the number of times a company sells and replaces its inventory during a certain period. A higher inventory turnover ratio typically suggests that the company is efficiently managing its inventory by quickly selling and restocking goods. It can also indicate strong demand for the company's products.

In the case of Commercial Metals Company, the increasing trend in inventory turnover reflects a more efficient management of inventory over time. This could be attributed to improvements in supply chain management, better demand forecasting, or streamlined inventory control processes.

However, it is also important to consider the industry norms and benchmarks when interpreting inventory turnover ratios. Comparing Commercial Metals Company's ratios to those of its industry peers can provide a more accurate assessment of its inventory management efficiency.

Overall, the increasing trend in inventory turnover for Commercial Metals Company signals positive operational efficiency and effective inventory management strategies, which can be indicative of competitive strength and financial health.