DR Horton Inc (DHI)

Inventory turnover

		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	Dec 31, 2019
Cost of revenue (ttm)	US$ in thousands	27,266,100	27,498,500	27,316,600	26,538,500	26,110,000	25,190,300	23,927,800	23,361,500	22,975,900	21,918,100	21,251,400	20,472,400	19,899,200	18,949,500	17,821,600	16,621,500	15,373,200	14,501,200	14,248,100	14,054,000
Inventory	US$ in thousands	24,903,200	25,536,100	24,840,000	24,050,300	22,373,300	22,983,500	22,571,700	22,445,300	21,655,700	21,698,900	19,846,500	18,202,500	16,479,100	16,011,700	14,476,300	13,576,500	12,237,400	12,138,700	12,224,500	11,899,200
Inventory turnover		1.09	1.08	1.10	1.10	1.17	1.10	1.06	1.04	1.06	1.01	1.07	1.12	1.21	1.18	1.23	1.22	1.26	1.19	1.17	1.18

September 30, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $27,266,100K ÷ $24,903,200K
= 1.09

DR Horton Inc's inventory turnover ratio indicates how efficiently the company manages its inventory over the given period. Over the analyzed period from December 2019 to September 2024, the inventory turnover ratio has fluctuated, ranging from a low of 1.01 to a high of 1.26.

The general trend shows a slight increase in inventory turnover from the end of 2019 to early 2021, reaching a peak of 1.23 in March 2021. Subsequently, there was a gradual decline in the inventory turnover ratio until September 2021. From September 2021 to December 2022, the ratio started to increase, peaking at 1.26 in September 2024.

A higher inventory turnover ratio generally indicates that the company is selling goods quickly, which can be a positive sign of efficient operations. However, a very high ratio may also suggest insufficient inventory levels, which could lead to potential stockouts.

Overall, DR Horton's inventory turnover has shown variability over the past few years but has generally remained within a reasonable range, indicating a balanced approach to managing inventory levels. It is essential for the company to monitor this ratio closely to ensure optimal inventory management and operational efficiency.