Neogen Corporation (NEOG)

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	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	342,391
Inventory	US$ in thousands	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	85,992
Inventory turnover		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	3.98

February 29, 2024 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $932,892K ÷ $182,390K
= 5.11

Neogen Corporation's inventory turnover has exhibited fluctuations over the past several quarters. The inventory turnover ratio measures how efficiently the company is managing its inventory by showing how many times it sells and replaces its inventory over a specific period.

From Nov 30, 2019, to Feb 29, 2020, the inventory turnover ratio was 3.98, indicating that Neogen Corporation was turning over its inventory approximately 3.98 times during that period. The ratio decreased slightly to 3.89 by May 31, 2020, but then increased to 3.63 by Aug 31, 2020.

Starting from Nov 30, 2020, there was a steady increase in the inventory turnover ratio, reaching 6.65 by Aug 31, 2023. This implies that the company was selling and replacing its inventory more frequently, which could be a sign of improved efficiency in managing inventory levels.

However, in the most recent quarter, Feb 29, 2024, the inventory turnover ratio decreased to 5.11, indicating a slower rate of inventory turnover compared to the previous quarter. It is important for Neogen Corporation to closely monitor its inventory turnover ratio to ensure optimal inventory management and maximize profitability.