FedEx Corporation (FDX)
Inventory turnover
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 39,058,000 | 40,053,000 | 42,009,000 | 35,310,000 | 32,586,000 |
| Inventory | US$ in thousands | 614,000 | 604,000 | 637,000 | 587,000 | 572,000 |
| Inventory turnover | 63.61 | 66.31 | 65.95 | 60.15 | 56.97 |
May 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $39,058,000K ÷ $614,000K
= 63.61
FedEx Corporation's inventory turnover has shown a consistent increasing trend over the past five years, indicating the company's ability to efficiently manage and sell its inventory. The inventory turnover ratio was 56.97 in 2020, which has steadily improved to 63.61 in 2024. This improvement suggests that FedEx is selling its inventory at a faster rate, which can lead to lower carrying costs and potentially higher profitability.
A higher inventory turnover ratio is generally seen as positive as it reflects that the company is effectively managing its inventory levels and turning over stock more frequently. This efficiency is essential in the logistics and transportation industry where inventory management plays a crucial role in operations.
In conclusion, FedEx Corporation's inventory turnover ratios demonstrate an improving trend over the past five years, indicating effective inventory management practices within the company.