REX American Resources Corporation (REX)

Inventory turnover

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020
Cost of revenue	US$ in thousands	735,166	800,269	677,242	353,131	397,298
Inventory	US$ in thousands	26,984	48,744	42,225	37,426	35,634
Inventory turnover		27.24	16.42	16.04	9.44	11.15

January 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $735,166K ÷ $26,984K
= 27.24

Inventory turnover measures how many times a company's inventory is sold and replaced over a specific period. A higher inventory turnover ratio indicates that the company is selling its inventory more efficiently.

Analyzing the inventory turnover of REX American Resources Corporation over the past five years, we observe an increasing trend. The inventory turnover ratio has steadily improved from 11.15 in 2020 to 27.24 in 2024. This suggests that the company has been managing its inventory more effectively, either by improving sales processes, optimizing inventory levels, or enhancing supply chain management.

A high inventory turnover ratio can indicate strong sales and operational efficiency, but it can also suggest aggressive inventory management, possibly leading to stockouts or reduced flexibility to meet unexpected demand. On the other hand, a low ratio may imply obsolescence, overstocking, or poor sales performance.

In conclusion, the increasing trend in REX American Resources Corporation's inventory turnover ratio reflects improving efficiency in managing inventory, which could potentially lead to better financial performance and operational effectiveness. However, it is essential for the company to maintain a balance between inventory turnover and meeting customer demand to ensure sustainable growth.