CarMax Inc (KMX)

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	23,822,830	23,893,930	24,287,520	25,318,110	26,884,670	28,748,870	30,510,800	30,276,020	28,612,880	26,160,060	23,022,370	20,469,510	16,571,020	16,337,760	15,960,630	15,848,310	17,597,650	17,027,240	16,577,490	16,185,190
Inventory	US$ in thousands	3,678,070	3,638,950	3,839,290	4,081,220	3,726,140	3,414,940	4,671,680	4,691,080	5,124,570	4,659,460	4,105,460	3,248,850	3,157,160	2,780,200	2,824,960	1,899,430	2,846,420	2,682,570	2,604,750	2,551,140
Inventory turnover		6.48	6.57	6.33	6.20	7.22	8.42	6.53	6.45	5.58	5.61	5.61	6.30	5.25	5.88	5.65	8.34	6.18	6.35	6.36	6.34

February 29, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $23,822,830K ÷ $3,678,070K
= 6.48

CarMax Inc's inventory turnover ratio has shown fluctuation over the past several quarters. The inventory turnover ratio measures how many times a company's inventory is sold and replaced over a period of time. A higher inventory turnover ratio generally indicates that the company is selling its inventory more efficiently.

From Nov 30, 2019, to Nov 30, 2020, CarMax's inventory turnover ratio saw a significant decline from 6.34 to 5.25, suggesting a decrease in the efficiency of inventory management during that period. However, from Nov 30, 2020, to Nov 30, 2021, the ratio improved to 5.88 before further increasing to 6.30 by Aug 31, 2022.

The highest inventory turnover ratio was recorded on Nov 30, 2022, at 8.42, indicating that CarMax was effectively managing and selling its inventory at that time. Subsequently, the ratio decreased to 6.53 by Feb 28, 2023, and has continued to fluctuate within the range of 5.58 to 7.22 over the following quarters.

Overall, while there have been fluctuations in CarMax Inc's inventory turnover ratio, it is essential for the company to maintain an optimal level that ensures efficient management of inventory and supports overall financial performance.