Neogen Corporation (NEOG)

Inventory turnover

		Aug 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	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019
Cost of revenue (ttm)	US$ in thousands	905,083	932,892	915,465	935,907	830,479	723,301	622,394	482,567	463,396	446,232	425,625	403,608	387,925	369,635	355,939	349,990	344,910	346,791	343,600	343,535
Inventory	US$ in thousands	198,596	182,390	160,529	140,692	133,812	143,863	136,069	129,039	122,313	113,395	107,086	102,109	100,701	99,267	92,529	97,573	95,053	89,244	86,406	87,682
Inventory turnover		4.56	5.11	5.70	6.65	6.21	5.03	4.57	3.74	3.79	3.94	3.97	3.95	3.85	3.72	3.85	3.59	3.63	3.89	3.98	3.92

August 31, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $905,083K ÷ $198,596K
= 4.56

Neogen Corporation's inventory turnover ratio has shown fluctuations over the past few years. The inventory turnover ratio indicates how many times a company's inventory is sold and replaced over a certain period. A higher inventory turnover ratio is generally favorable as it suggests efficient management of inventory.

From Nov 2019 to Aug 2022, Neogen Corporation experienced a gradual decline in its inventory turnover, dropping from 3.98 to 3.74. This decline may indicate potential issues with managing inventory levels, such as overstocking or slow-moving inventory.

However, from Aug 2022 to Nov 2023, there was a significant improvement in the inventory turnover ratio, increasing from 3.74 to 6.65. This improvement suggests that Neogen Corporation may have implemented more effective inventory management practices during this period.

Subsequently, there was a slight decrease in inventory turnover from Nov 2023 to Aug 2024, dropping from 6.65 to 4.56. While the ratio decreased, it still remained relatively high compared to previous periods, indicating that Neogen Corporation continued to efficiently manage its inventory levels.

Overall, Neogen Corporation's inventory turnover ratio has shown variability, with periods of both improvement and decline. Further analysis of the underlying reasons for these fluctuations would provide more insights into the company's inventory management practices and efficiency.