M/I Homes Inc (MHO)

Inventory turnover

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Cost of revenue	US$ in thousands	3,458,470	3,495,570	3,229,230	2,729,310	2,010,860
Inventory	US$ in thousands	2,797,150	2,828,600	2,452,430	1,916,610	1,769,510
Inventory turnover		1.24	1.24	1.32	1.42	1.14

December 31, 2023 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $3,458,470K ÷ $2,797,150K
= 1.24

MI Homes Inc. has consistently reported an inventory turnover of 0.00 for the past five years, indicating that the company is not effectively managing its inventory levels in relation to its sales. A low or zero inventory turnover ratio suggests that the company may be overstocked with inventory, obsolete inventory, or facing challenges in selling its products efficiently. This could potentially lead to increased storage costs, risks of inventory obsolescence, and reduced liquidity due to tied-up capital.

Given the repeated zero inventory turnover over the years, it is crucial for MI Homes Inc. to reassess its inventory management practices, streamline its inventory levels, and improve its forecasting and sales strategies to enhance operational efficiency and profitability. Additionally, the company should focus on optimizing its inventory turnover ratio to ensure a healthy balance between inventory levels and sales volume.