CarMax Inc (KMX)

Inventory turnover

		Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	May 31, 2024	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
Cost of revenue (ttm)	US$ in thousands	23,521,580	23,292,130	23,282,090	23,406,100	23,888,200	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
Inventory	US$ in thousands	3,934,620	3,665,160	3,397,750	3,772,880	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
Inventory turnover		5.98	6.36	6.85	6.20	6.49	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

February 28, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $23,521,580K ÷ $3,934,620K
= 5.98

CarMax Inc's inventory turnover has shown some fluctuations over the years based on the provided data. The inventory turnover ratio is a measure of how efficiently a company manages its inventory by indicating how many times a company sells and replaces its inventory during a specific period.

From May 31, 2020, to August 31, 2020, the inventory turnover decreased from 8.34 to 5.65. This significant drop suggests that CarMax may have had excess inventory or faced challenges in selling its products efficiently during this period. However, the ratio showed some improvement by May 31, 2021, reaching 6.30, indicating better inventory management.

Throughout the following years, the inventory turnover ratio fluctuated around the range of 5 to 8 times, showing some variability in CarMax's ability to efficiently turn over its inventory. Notably, there was a peak of 8.42 on November 30, 2022, which might indicate a period of strong sales relative to the level of inventory held.

Overall, CarMax Inc's inventory turnover ratio over the years suggests that the company has been able to manage its inventory efficiently, with some fluctuations reflecting changes in consumer demand, operational efficiency, and inventory management strategies. An increasing inventory turnover ratio generally signifies better inventory management and faster sales, while a decreasing ratio may indicate challenges in selling products efficiently.