DR Horton Inc (DHI)

Inventory turnover

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Cost of revenue	US$ in thousands	26,110,000	22,975,900	19,899,200	15,373,200	13,720,900
Inventory	US$ in thousands	22,373,300	21,655,700	16,479,100	12,237,400	11,282,000
Inventory turnover		1.17	1.06	1.21	1.26	1.22

September 30, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $26,110,000K ÷ $22,373,300K
= 1.17

The inventory turnover ratio for D.R. Horton Inc. has varied over the past five years, ranging from 1.06 to 1.26. This ratio indicates how efficiently the company manages its inventory by measuring the number of times the inventory is sold and replaced within a specific period. A higher ratio is generally favorable, as it suggests that the company is selling its inventory quickly and efficiently.

The decreasing trend in inventory turnover from 1.26 in 2020 to 1.17 in 2023 may indicate that the company is holding onto its inventory for a longer period before selling it. This could potentially tie up working capital and increase the risk of holding obsolete or slow-moving inventory.

It's important for investors and stakeholders to closely monitor the inventory turnover ratio to assess the company's ability to manage its inventory effectively and adapt to changing market conditions. Further analysis of the company's inventory management practices and industry-specific factors could provide valuable insights into the implications of the fluctuations in the inventory turnover ratio.