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.
Peer comparison
Jan 31, 2024