Neogen Corporation (NEOG)

Inventory turnover

		May 31, 2024	May 31, 2023	May 31, 2022	May 31, 2021	May 31, 2020
Cost of revenue	US$ in thousands	460,322	416,492	284,146	253,403	221,891
Inventory	US$ in thousands	189,267	133,812	122,313	100,701	95,053
Inventory turnover		2.43	3.11	2.32	2.52	2.33

May 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $460,322K ÷ $189,267K
= 2.43

Neogen Corporation's inventory turnover has shown some variability over the past five years. The inventory turnover ratio measures how efficiently a company manages its inventory by indicating how many times a company sells and replaces its inventory within a given period.

In May 31, 2020, the inventory turnover was 2.33, which increased slightly to 2.52 by May 31, 2021. However, there was a decrease in inventory turnover to 2.32 by May 31, 2022. This suggests some challenges in managing inventory efficiently during that period.

The inventory turnover significantly improved to 3.11 by May 31, 2023, indicating that Neogen Corporation was able to sell and replace its inventory more swiftly, possibly due to effective inventory management practices or increased demand for its products.

Subsequently, there was a slight decrease in inventory turnover to 2.43 by May 31, 2024. While this decrease may indicate a slower rate of inventory turnover compared to the previous year, it is important to consider external factors such as changes in demand or supply chain disruptions that may have impacted inventory management during that period.

Overall, Neogen Corporation's inventory turnover has shown some fluctuations but has generally remained within a reasonable range, reflecting efforts to efficiently manage its inventory levels to meet customer demand and optimize operational performance.