Reliance Steel & Aluminum Co (RS)
Inventory turnover
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cost of revenue | US$ in thousands | 9,728,400 | 10,504,000 | 11,773,700 | 9,603,000 | 6,036,800 |
| Inventory | US$ in thousands | 2,026,800 | 2,043,200 | 1,995,300 | 2,065,000 | 1,420,400 |
| Inventory turnover | 4.80 | 5.14 | 5.90 | 4.65 | 4.25 |
December 31, 2024 calculation
Inventory turnover = Cost of revenue ÷ Inventory
= $9,728,400K ÷ $2,026,800K
= 4.80
Reliance Steel & Aluminum Co's inventory turnover has shown a positive trend over the past five years. The company's inventory turnover ratio increased from 4.25 in December 31, 2020, to 5.14 in December 31, 2023, before dipping slightly to 4.80 in December 31, 2024. This indicates that, on average, the company generated sales revenue equivalent to its inventory holdings multiple times during the respective periods.
The increasing trend in inventory turnover suggests that Reliance Steel & Aluminum Co efficiently manages its inventory and effectively converts it into sales. A higher inventory turnover ratio is generally seen as positive, indicating effective inventory management, shorter storage times, and potentially lower carrying costs.
However, the slight decrease in inventory turnover in 2024 compared to the previous year warrants monitoring to ensure that it does not signify challenges with sales or excess inventory accumulation. Overall, the trend in inventory turnover for Reliance Steel & Aluminum Co reflects sound inventory management practices, indicating the company's ability to efficiently utilize its inventory resources to drive sales.