Neogen Corporation (NEOG)

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	463,993	465,207	460,134	460,322	455,638	454,000	458,639	416,492	372,958	333,499	285,928	284,146	278,786	270,814	262,677	253,403	241,014	232,693	227,684	221,891
Inventory	US$ in thousands	205,442	198,267	198,596	189,267	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
Inventory turnover		2.26	2.35	2.32	2.43	2.50	2.83	3.26	3.11	2.59	2.45	2.22	2.32	2.46	2.53	2.57	2.52	2.43	2.51	2.33	2.33

February 28, 2025 calculation

Inventory turnover = Cost of revenue (ttm) ÷ Inventory
= $463,993K ÷ $205,442K
= 2.26

The inventory turnover ratio measures the number of times a company's inventory is sold and replaced over a specific period. Looking at the inventory turnover data for Neogen Corporation from May 31, 2020, to February 28, 2025, we observe fluctuations in the ratio over time.

From May 31, 2020, to May 31, 2022, the inventory turnover ratio remained relatively stable, ranging between 2.32 and 2.57. This indicates that Neogen Corporation was effectively managing its inventory during this period.

A noticeable increase in inventory turnover is seen from May 31, 2022, onward, with the ratio steadily climbing to 3.26 by August 31, 2023. This substantial increase may suggest that Neogen Corporation was either more efficiently selling its inventory or streamlining its inventory management processes during this period.

However, there was a decline in the inventory turnover ratio from August 31, 2023, to February 28, 2025, with the ratio fluctuating between 2.26 and 2.59. This decline may indicate either changes in demand for Neogen Corporation's products, challenges in inventory management, or shifts in the company's overall operations.

Overall, it is essential for Neogen Corporation to consistently monitor its inventory turnover ratio to ensure efficient management of its inventory and to adapt to changing market conditions effectively.